Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2022

Amortized Cost and Unpaid Principal Balance of Loans by Loan Segment

The following table presents amortized cost and unpaid principal balance of loans for the periods indicated:


	March 31, 2022			December 31, 2021
(In Thousands)	Amortized Cost	Unpaid Principal	Difference	Amortized Cost	Unpaid Principal	Difference
Commercial & industrial loans	$404,789	$408,451	($3,662)	$448,338	$454,106	($5,768)
Commercial real estate:
Owner occupied properties	304,595	306,070	(1,475)	300,200	301,623	(1,423)
Non-owner occupied and multifamily properties	428,618	431,855	(3,237)	435,311	438,631	(3,320)
Residential real estate:
1-4 family residential properties secured by first liens	31,241	31,300	(59)	32,542	32,602	(60)
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	19,523	19,400	123	19,610	19,489	121
1-4 family residential construction loans	38,836	39,146	(310)	36,222	36,542	(320)
Other construction, land development and raw land loans	91,328	91,819	(491)	88,094	88,604	(510)
Obligations of states and political subdivisions in the US	20,938	21,090	(152)	16,403	16,565	(162)
Agricultural production, including commercial fishing	29,217	29,358	(141)	27,959	28,082	(123)
Consumer loans	4,618	4,580	38	4,801	4,763	38
Other loans	3,684	3,699	(15)	4,406	4,422	(16)
Total	1,377,387	1,386,768	(9,381)	1,413,886	1,425,429	(11,543)
Allowance for credit losses	(11,310)			(11,739)
	$1,366,077	$1,386,768	($9,381)	$1,402,147	$1,425,429	($11,543)

Allowance for Credit Losses

The activity in the ACL related to loans held for investment is as follows:


Three Months Ended March 31,	Beginning Balance	Credit Loss Expense (Benefit)	Charge-offs	Recoveries	Ending Balance
	(In Thousands)
2022
Commercial & industrial loans	$3,027	$156	($295)	$13	$2,901
Commercial real estate:
Owner occupied properties	3,176	(663)	—	—	2,513
Non-owner occupied and multifamily properties	2,930	133	—	—	3,063
Residential real estate:
1-4 family residential properties secured by first liens	439	71	—	—	510
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	215	74	—	12	301
1-4 family residential construction loans	120	90	—	—	210
Other construction, land development and raw land loans	1,635	(85)	—	—	1,550
Obligations of states and political subdivisions in the US	32	20	—	—	52
Agricultural production, including commercial fishing	91	29	—	8	128
Consumer loans	67	8	—	—	75
Other loans	7	—	—	—	7
Total	$11,739	($167)	($295)	$33	$11,310
2021
Commercial & industrial loans	$4,348	($101)	($163)	$185	$4,269
Commercial real estate:
Owner occupied properties	3,579	(215)	—	2	3,366
Non-owner occupied and multifamily properties	4,944	(1,240)	—	—	3,704
Residential real estate:
1-4 family residential properties secured by first liens	673	140	—	—	813
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	419	(87)	—	10	342
1-4 family residential construction loans	454	(194)	—	—	260
Other construction, land development and raw land loans	1,994	(173)	—	—	1,821
Obligations of states and political subdivisions in the US	44	(8)	—	—	36
Agricultural production, including commercial fishing	49	(11)	—	8	46
Consumer loans	118	(16)	—	2	104
Other loans	3	—	—	—	3
Total	$16,625	($1,905)	($163)	$207	$14,764

Portfolio of Risk-rated Loans by Grade and by Year of Origination

The following tables present the Company's portfolio of risk-rated loans by grade and by year of origination. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal of loan constitutes a current period origination. Generally, current period renewals of credit are re-underwritten at the point of renewal and considered current period originations for purposes of the table below.


March 31, 2022	2022	2021	2020	2019	2018	Prior	Total
	(In Thousands)
Commercial & industrial loans
Pass	$46,524	$171,908	$52,630	$30,871	$32,130	$62,733	$396,796
Classified	2,647	563	166	13	3,034	1,570	7,993
Total commercial & industrial loans	$49,171	$172,471	$52,796	$30,884	$35,164	$64,303	$404,789

Commercial real estate:
Owner occupied properties
Pass	$8,232	$85,813	$79,996	$38,621	$14,219	$68,938	$295,819
Classified	—	—	1,364	—	510	6,902	8,776
Total commercial real estate owner occupied properties	$8,232	$85,813	$81,360	$38,621	$14,729	$75,840	$304,595

Non-owner occupied and multifamily properties
Pass	$6,610	$73,643	$75,974	$57,236	$34,050	$170,879	$418,392
Classified	—	—	—	—	8	10,218	10,226
Total commercial real estate non-owner occupied and multifamily properties	$6,610	$73,643	$75,974	$57,236	$34,058	$181,097	$428,618

Residential real estate:
1-4 family residential properties secured by first liens
Pass	$972	$11,979	$6,994	$3,433	$517	$6,238	$30,133
Classified	—	285	531	—	90	202	1,108
Total residential real estate 1-4 family residential properties secured by first liens	$972	$12,264	$7,525	$3,433	$607	$6,440	$31,241

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens
Pass	$971	$5,500	$2,501	$3,110	$3,242	$3,934	$19,258
Classified	—	—	—	—	253	12	265


Total residential real estate 1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	$971	$5,500	$2,501	$3,110	$3,495	$3,946	$19,523

1-4 family residential construction loans
Pass	$8,877	$16,208	$653	$1,137	$—	$11,852	$38,727
Classified	—	—	—	—	—	109	109
Total residential real estate 1-4 family residential construction loans	$8,877	$16,208	$653	$1,137	$—	$11,961	$38,836

Other construction, land development and raw land loans
Pass	$966	$44,143	$25,438	$9,915	$3,347	$5,563	$89,372
Classified	—	—	—	—	460	1,496	1,956
Total other construction, land development and raw land loans	$966	$44,143	$25,438	$9,915	$3,807	$7,059	$91,328

Obligations of states and political subdivisions in the US
Pass	$—	$7,829	$1,836	$1,868	$161	$9,244	$20,938
Classified	—	—	—	—	—	—	—
Total obligations of states and political subdivisions in the US	$—	$7,829	$1,836	$1,868	$161	$9,244	$20,938

Agricultural production, including commercial fishing
Pass	$1,311	$19,958	$3,828	$806	$1,112	$2,202	$29,217
Classified	—	—	—	—	—	—	—
Total agricultural production, including commercial fishing	$1,311	$19,958	$3,828	$806	$1,112	$2,202	$29,217

Consumer loans
Pass	$373	$699	$765	$617	$337	$1,827	$4,618
Classified	—	—	—	—	—	—	—
Total consumer loans	$373	$699	$765	$617	$337	$1,827	$4,618

Other loans
Pass	$392	$1,110	$1,620	$417	$29	$116	$3,684
Classified	—	—	—	—	—	—	—
Total other loans	$392	$1,110	$1,620	$417	$29	$116	$3,684

Total loans
Pass	$75,228	$438,790	$252,235	$148,031	$89,144	$343,526	$1,346,954
Classified	2,647	848	2,061	13	4,355	20,509	30,433
Total loans	$77,875	$439,638	$254,296	$148,044	$93,499	$364,035	$1,377,387

Total pass loans	$75,228	$438,790	$252,235	$148,031	$89,144	$343,526	$1,346,954
Government guarantees	(869)	(94,725)	(11,664)	(13,422)	(3,222)	(3,795)	(127,697)
Total pass loans, net of government guarantees	$74,359	$344,065	$240,571	$134,609	$85,922	$339,731	$1,219,257

Total classified loans	$2,647	$848	$2,061	$13	$4,355	$20,509	$30,433
Government guarantees	(2,382)	(507)	(1,228)	—	—	(10,453)	(14,570)
Total classified loans, net government guarantees	$265	$341	$833	$13	$4,355	$10,056	$15,863


December 31, 2021	2021	2020	2019	2018	2017	Prior	Total
	(In Thousands)
Commercial & industrial loans
Pass	$227,376	$54,478	$29,846	$37,339	$23,205	$44,554	$416,798
Classified	18,853	714	3,564	3,118	517	4,774	31,540
Total commercial & industrial loans	$246,229	$55,192	$33,410	$40,457	$23,722	$49,328	$448,338

Commercial real estate:
Owner occupied properties
Pass	$81,533	$83,975	$39,254	$14,841	$14,452	$57,717	$291,772
Classified	—	1,399	—	522	—	6,507	8,428


Total commercial real estate owner occupied properties	$81,533	$85,374	$39,254	$15,363	$14,452	$64,224	$300,200

Non-owner occupied and multifamily properties
Pass	$77,205	$77,961	$61,147	$34,307	$19,833	$154,561	$425,014
Classified	—	—	—	10	10,286	1	10,297
Total commercial real estate non-owner occupied and multifamily properties	$77,205	$77,961	$61,147	$34,317	$30,119	$154,562	$435,311

Residential real estate:
1-4 family residential properties secured by first liens
Pass	$7,756	$8,023	$3,689	$531	$1,466	$8,812	$30,277
Classified	417	1,077	472	90	—	209	2,265
Total residential real estate 1-4 family residential properties secured by first liens	$8,173	$9,100	$4,161	$621	$1,466	$9,021	$32,542

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens
Pass	$5,806	$2,535	$3,229	$3,464	$259	$4,046	$19,339
Classified	—	—	—	259	—	12	271
Total residential real estate 1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	$5,806	$2,535	$3,229	$3,723	$259	$4,058	$19,610

1-4 family residential construction loans
Pass	$21,409	$1,056	$1,707	$62	$—	$11,879	$36,113
Classified	—	—	—	—	109	—	109
Total residential real estate 1-4 family residential construction loans	$21,409	$1,056	$1,707	$62	$109	$11,879	$36,222

Other construction, land development and raw land loans
Pass	$39,624	$26,458	$11,044	$3,315	$139	$5,544	$86,124
Classified	—	—	—	460	—	1,510	1,970
Total other construction, land development and raw land loans	$39,624	$26,458	$11,044	$3,775	$139	$7,054	$88,094

Obligations of states and political subdivisions in the US
Pass	$4,120	$812	$1,875	$343	$2,733	$6,520	$16,403
Classified	—	—	—	—	—	—	—
Total obligations of states and political subdivisions in the US	$4,120	$812	$1,875	$343	$2,733	$6,520	$16,403

Agricultural production, including commercial fishing
Pass	$19,970	$3,929	$810	$1,118	$741	$1,391	$27,959
Classified	—	—	—	—	—	—	—
Total agricultural production, including commercial fishing	$19,970	$3,929	$810	$1,118	$741	$1,391	$27,959

Consumer loans
Pass	$873	$815	$653	$403	$291	$1,766	$4,801
Classified	—	—	—	—	—	—	—
Total consumer loans	$873	$815	$653	$403	$291	$1,766	$4,801

Other loans
Pass	$2,028	$1,645	$430	$95	$—	$208	$4,406
Classified	—	—	—	—	—	—	—
Total other loans	$2,028	$1,645	$430	$95	$—	$208	$4,406

Total loans
Pass	$487,700	$261,687	$153,684	$95,818	$63,119	$296,998	$1,359,006
Classified	19,270	3,190	4,036	4,459	10,912	13,013	54,880
Total loans	$506,970	$264,877	$157,720	$100,277	$74,031	$310,011	$1,413,886

Total pass loans	$487,700	$261,687	$153,684	$95,818	$63,119	$296,998	$1,359,006
Government guarantees	(145,713)	(12,725)	(14,429)	(3,299)	(306)	(6,562)	(183,034)
Total pass loans, net of government guarantees	$341,987	$248,962	$139,255	$92,519	$62,813	$290,436	$1,175,972

Total classified loans	$19,270	$3,190	$4,036	$4,459	$10,912	$13,013	$54,880


Government guarantees	(7,201)	(1,259)	—	—	—	(10,571)	(19,031)
Total classified loans, net government guarantees	$12,069	$1,931	$4,036	$4,459	$10,912	$2,442	$35,849

Aging of Contractually Past Due Loans

The following tables present an aging of contractually past due loans:


(In Thousands)	30-59 Days Past Due	60-89 Days Past Due	Greater Than 90 Days Past Due	Total Past Due	Current	Total	Greater Than 90 Days Past Due Still Accruing
March 31, 2022
Commercial & industrial loans	$305	$166	$418	$889	$403,900	$404,789	$—
Commercial real estate:
Owner occupied properties	8	—	1,120	1,128	303,467	304,595	—
Non-owner occupied and multifamily properties	283	—	—	283	428,335	428,618	—
Residential real estate:
1-4 family residential properties secured by first liens	69	—	90	159	31,082	31,241	—
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	22	—	136	158	19,365	19,523	—
1-4 family residential construction loans	—	—	109	109	38,727	38,836	—
Other construction, land development and raw land loans	—	—	1,636	1,636	89,692	91,328	—
Obligations of states and political subdivisions in the US	—	—	—	—	20,938	20,938	—
Agricultural production, including commercial fishing	—	—	—	—	29,217	29,217	—
Consumer loans	11	—	—	11	4,607	4,618	—
Other loans	—	—	—	—	3,684	3,684	—
Total	$698	$166	$3,509	$4,373	$1,373,014	$1,377,387	$—
December 31, 2021
Commercial & industrial loans	$206	$51	$469	$726	$447,612	$448,338	$—
Commercial real estate:
Owner occupied properties	12	—	1,176	1,188	299,012	300,200	—
Non-owner occupied and multifamily properties	—	—	—	—	435,311	435,311	—
Residential real estate:
1-4 family residential properties secured by first liens	—	—	90	90	32,452	32,542	—
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	—	—	139	139	19,471	19,610	—
1-4 family residential construction loans	—	—	109	109	36,113	36,222	—
Other construction, land development and raw land loans	—	—	1,636	1,636	86,458	88,094	—
Obligations of states and political subdivisions in the US	—	—	—	—	16,403	16,403	—
Agricultural production, including commercial fishing	—	—	—	—	27,959	27,959	—
Consumer loans	—	—	—	—	4,801	4,801	—
Other loans	—	—	—	—	4,406	4,406	—
Total	$218	$51	$3,619	$3,888	$1,409,998	$1,413,886	$—

Loans on Nonaccrual Status

The following table presents loans on nonaccrual status and loans on nonaccrual

status for which there was no related allowance for credit losses. All loans with no allowance for credit losses are individually evaluated for credit losses in the Company's CECL methodology.


	March 31, 2022		December 31, 2021
(In Thousands)	Nonaccrual	Nonaccrual With No ACL	Nonaccrual	Nonaccrual With No ACL

Commercial & industrial loans	$4,014	$3,847	$4,350	$4,298
Commercial real estate:
Owner occupied properties	3,362	3,362	3,506	3,506

Residential real estate:
1-4 family residential properties secured by first liens	223	223	1,778	1,778
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	265	211	271	215
1-4 family residential construction loans	109	109	109	109
Other construction, land development and raw land loans	1,636	1,636	1,636	1,636


Consumer loans	—	—	—	—

Total nonaccrual loans	9,609	9,388	11,650	11,542
Government guarantees on nonaccrual loans	(907)	(907)	(978)	(978)
Net nonaccrual loans	$8,702	$8,481	$10,672	$10,564

Non Troubled Debt Restructuring

The Company has made the following types of loan modifications related to COVID-19, which are not classified as TDRs with principal balance outstanding of:


Loan Modifications due to COVID-19 as of March 31, 2022
(Dollars in thousands)	Interest Only	Full Payment Deferral	Total
Portfolio loans	$45,074	$—	$45,074
Number of modifications	13	—	13


Loan Modifications due to COVID-19 as of December 31, 2021
(Dollars in thousands)	Interest Only	Full Payment Deferral	Total
Portfolio loans	$49,219	$—	$49,219
Number of modifications	16	—	16

Troubled Debt Restructured Loans

As discussed above, the CARES Act provided banks an option to elect to not account for certain loan modifications related to COVID-19 between March 1, 2020 and December 31, 2021 as TDRs as long as the borrowers were not more than 30 days past due as of December 31, 2019. The disclosed restructurings were not related to COVID-19 modifications.


	Accrual Status	Nonaccrual Status	Total Modifications
(In Thousands)






Existing Troubled Debt Restructurings	$2,978	$7,062	$10,040
Total	$2,978	$7,062	$10,040