Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2023

Amortized Cost and Unpaid Principal Balance of Loans by Loan Segment

The following table presents amortized cost and unpaid principal balance of loans, categorized by the segments used in the Company's CECL methodology to assess credit risk, for the periods indicated:


	March 31, 2023			December 31, 2022
(In Thousands)	Amortized Cost	Unpaid Principal	Difference	Amortized Cost	Unpaid Principal	Difference
Commercial & industrial loans	$364,109	$365,824	($1,715)	$358,128	$359,900	($1,772)
Commercial real estate:
Owner occupied properties	343,162	344,734	(1,572)	349,973	351,580	(1,607)
Non-owner occupied and multifamily properties	473,227	476,897	(3,670)	482,270	486,021	(3,751)
Residential real estate:
1-4 family residential properties secured by first liens	112,214	112,758	(544)	73,381	73,674	(293)
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	23,027	22,864	163	20,259	20,103	156
1-4 family residential construction loans	40,652	40,881	(229)	44,000	44,314	(314)
Other construction, land development and raw land loans	91,712	92,615	(903)	99,182	100,075	(893)
Obligations of states and political subdivisions in the US	42,257	42,258	(1)	32,539	32,540	(1)
Agricultural production, including commercial fishing	37,429	37,615	(186)	34,099	34,263	(164)
Consumer loans	4,661	4,617	44	4,335	4,293	42
Other loans	2,737	2,749	(12)	3,619	3,632	(13)
Total	1,535,187	1,543,812	(8,625)	1,501,785	1,510,395	(8,610)
Allowance for credit losses	(14,157)			(13,838)
	$1,521,030	$1,543,812	($8,625)	$1,487,947	$1,510,395	($8,610)

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)
2023
Commercial & industrial loans	$2,914	$101	$—	$65	$3,080
Commercial real estate:
Owner occupied properties	3,094	(316)	—	—	2,778
Non-owner occupied and multifamily properties	3,615	(441)	—	—	3,174
Residential real estate:
1-4 family residential properties secured by first liens	1,413	813	—	—	2,226
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	389	(4)	—	7	392
1-4 family residential construction loans	312	(52)	—	—	260
Other construction, land development and raw land loans	1,803	122	—	—	1,925
Obligations of states and political subdivisions in the US	79	27	—	—	106
Agricultural production, including commercial fishing	145	5	—	—	150
Consumer loans	68	5	(14)	2	61
Other loans	6	(1)	—	—	5
Total	$13,838	$259	($14)	$74	$14,157
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

Schedule of Financing Receivables For Gross Charge-Offs By Grade And Year Of Loan Origination

The following table shows gross charge-offs by grade and by year of loan origination for the periods indicated:


Three Months Ended March 31,

(In Thousands)	2023		2022		2021		2020		2019		Prior		Total
2023
Commercial & industrial loans	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate:
Owner occupied properties	—		—		—		—		—		—		—
Non-owner occupied and multifamily properties	—		—		—		—		—		—		—
Residential real estate:
1-4 family residential properties secured by first liens	—		—		—		—		—		—		—
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	—		—		—		—		—		—		—
1-4 family residential construction loans	—		—		—		—		—		—		—
Other construction, land development and raw land loans	—		—		—		—		—		—		—
Obligations of states and political subdivisions in the US	—		—		—		—		—		—		—
Agricultural production, including commercial fishing	—		—		—		—		—		—		—
Consumer loans	—		1		—		—		—		13		14
Other loans	—		—		—		—		—		—		—
Total	$	—	$	1	$	—	$	—	$	—	$	13	$	14

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, 2023	2023	2022	2021	2020	2019	Prior	Total
	(In Thousands)
Commercial & industrial loans
Pass	$26,360	$152,979	$76,827	$35,707	$14,276	$38,286	$344,435
Classified	—	2,110	2,323	296	82	14,863	19,674
Total commercial & industrial loans	$26,360	$155,089	$79,150	$36,003	$14,358	$53,149	$364,109

Commercial real estate:
Owner occupied properties
Pass	$6,838	$71,615	$69,568	$80,727	$31,920	$76,882	$337,550
Classified	—	—	—	1,225	—	4,387	5,612
Total commercial real estate owner occupied properties	$6,838	$71,615	$69,568	$81,952	$31,920	$81,269	$343,162

Non-owner occupied and multifamily properties
Pass	$2,270	$90,117	$86,571	$70,530	$57,437	$156,716	$463,641
Classified	—	—	—	—	—	9,586	9,586
Total commercial real estate non-owner occupied and multifamily properties	$2,270	$90,117	$86,571	$70,530	$57,437	$166,302	$473,227

Residential real estate:
1-4 family residential properties secured by first liens
Pass	$41,478	$51,491	$4,066	$5,399	$2,502	$7,078	$112,014
Classified	—	—	—	—	—	200	200
Total residential real estate 1-4 family residential properties secured by first liens	$41,478	$51,491	$4,066	$5,399	$2,502	$7,278	$112,214

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens
Pass	$2,476	$7,050	$3,892	$1,902	$2,650	$4,818	$22,788
Classified	—	—	—	—	—	239	239
Total residential real estate 1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	$2,476	$7,050	$3,892	$1,902	$2,650	$5,057	$23,027

1-4 family residential construction loans
Pass	$2,912	$22,906	$2,871	$420	$—	$11,434	$40,543
Classified	—	—	—	—	—	109	109
Total residential real estate 1-4 family residential construction loans	$2,912	$22,906	$2,871	$420	$—	$11,543	$40,652

Other construction, land development and raw land loans
Pass	$3,300	$39,120	$28,668	$8,756	$1,594	$8,458	$89,896
Classified	—	—	—	—	—	1,816	1,816
Total other construction, land development and raw land loans	$3,300	$39,120	$28,668	$8,756	$1,594	$10,274	$91,712

Obligations of states and political subdivisions in the US
Pass	$—	$33,467	$6,866	$1,739	$—	$185	$42,257
Classified	—	—	—	—	—	—	—
Total obligations of states and political subdivisions in the US	$—	$33,467	$6,866	$1,739	$—	$185	$42,257

Agricultural production, including commercial fishing
Pass	$2,431	$10,376	$18,196	$3,655	$599	$2,172	$37,429


Classified	—	—	—	—	—	—	—
Total agricultural production, including commercial fishing	$2,431	$10,376	$18,196	$3,655	$599	$2,172	$37,429

Consumer loans
Pass	$964	$1,292	$327	$493	$324	$1,261	$4,661
Classified	—	—	—	—	—	—	—
Total consumer loans	$964	$1,292	$327	$493	$324	$1,261	$4,661

Other loans
Pass	$257	$216	$325	$1,523	$360	$56	$2,737
Classified	—	—	—	—	—	—	—
Total other loans	$257	$216	$325	$1,523	$360	$56	$2,737

Total loans
Pass	$89,286	$480,629	$298,177	$210,851	$111,662	$307,346	$1,497,951
Classified	—	2,110	2,323	1,521	82	31,200	37,236
Total loans	$89,286	$482,739	$300,500	$212,372	$111,744	$338,546	$1,535,187

Total pass loans	$89,286	$480,629	$298,177	$210,851	$111,662	$307,346	$1,497,951
Government guarantees	(2,850)	(24,594)	(33,665)	(9,395)	(12,711)	(8,147)	(91,362)
Total pass loans, net of government guarantees	$86,436	$456,035	$264,512	$201,456	$98,951	$299,199	$1,406,589

Total classified loans	$—	$2,110	$2,323	$1,521	$82	$31,200	$37,236
Government guarantees	—	—	(2,096)	(1,103)	—	(11,269)	(14,468)
Total classified loans, net government guarantees	$—	$2,110	$227	$418	$82	$19,931	$22,768


December 31, 2022	2022	2021	2020	2019	2018	Prior	Total
	(In Thousands)
Commercial & industrial loans
Pass	$157,555	$86,543	$37,147	$17,881	$9,844	$40,571	$349,541
Classified	137	4,879	397	91	2,737	346	8,587
Total commercial & industrial loans	$157,692	$91,422	$37,544	$17,972	$12,581	$40,917	$358,128

Commercial real estate:
Owner occupied properties
Pass	$66,955	$70,777	$90,496	$32,564	$13,233	$69,701	$343,726
Classified	—	—	1,261	—	165	4,821	6,247
Total commercial real estate owner occupied properties	$66,955	$70,777	$91,757	$32,564	$13,398	$74,522	$349,973

Non-owner occupied and multifamily properties
Pass	$94,412	$82,352	$71,407	$58,033	$16,905	$149,223	$472,332
Classified	—	—	—	274	3	9,661	9,938
Total commercial real estate non-owner occupied and multifamily properties	$94,412	$82,352	$71,407	$58,307	$16,908	$158,884	$482,270

Residential real estate:
1-4 family residential properties secured by first liens
Pass	$52,117	$5,088	$6,001	$2,535	$462	$6,968	$73,171
Classified	—	—	—	—	79	131	210
Total residential real estate 1-4 family residential properties secured by first liens	$52,117	$5,088	$6,001	$2,535	$541	$7,099	$73,381

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens
Pass	$6,992	$3,376	$2,041	$2,763	$2,781	$2,060	$20,013
Classified	—	—	—		239	7	246
Total residential real estate 1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	$6,992	$3,376	$2,041	$2,763	$3,020	$2,067	$20,259

1-4 family residential construction loans
Pass	$26,860	$3,897	$61	$—	$—	$13,073	$43,891


Classified	—	—	—	—	—	109	109
Total residential real estate 1-4 family residential construction loans	$26,860	$3,897	$61	$—	$—	$13,182	$44,000

Other construction, land development and raw land loans
Pass	$38,673	$42,448	$5,740	$1,713	$3,675	$5,112	$97,361
Classified	—	—	—	—	369	1,452	1,821
Total other construction, land development and raw land loans	$38,673	$42,448	$5,740	$1,713	$4,044	$6,564	$99,182

Obligations of states and political subdivisions in the US
Pass	$32,319	$—	$—	$—	$219	$1	$32,539
Classified	—	—	—	—	—	—	—
Total obligations of states and political subdivisions in the US	$32,319	$—	$—	$—	$219	$1	$32,539

Agricultural production, including commercial fishing
Pass	$9,748	$17,692	$3,740	$604	$879	$1,436	$34,099
Classified	—	—	—	—	—	—	—
Total agricultural production, including commercial fishing	$9,748	$17,692	$3,740	$604	$879	$1,436	$34,099

Consumer loans
Pass	$1,513	$363	$481	$345	$235	$1,391	$4,328
Classified	—	—	—	—	—	7	7
Total consumer loans	$1,513	$363	$481	$345	$235	$1,398	$4,335

Other loans
Pass	$1,291	$330	$1,547	$384	$—	$67	$3,619
Classified	—	—	—	—	—	—	—
Total other loans	$1,291	$330	$1,547	$384	$—	$67	$3,619

Total loans
Pass	$488,435	$312,866	$218,661	$116,822	$48,233	$289,603	$1,474,620
Classified	137	4,879	1,658	365	3,592	16,534	27,165
Total loans	$488,572	$317,745	$220,319	$117,187	$51,825	$306,137	$1,501,785

Total pass loans	$488,435	$312,866	$218,661	$116,822	$48,233	$289,603	$1,474,620
Government guarantees	(25,172)	(36,531)	(9,751)	(12,885)	(2,964)	(5,314)	(92,617)
Total pass loans, net of government guarantees	$463,263	$276,335	$208,910	$103,937	$45,269	$284,289	$1,382,003

Total classified loans	$137	$4,879	$1,658	$365	$3,592	$16,534	$27,165
Government guarantees	—	(4,396)	(1,135)	—	—	(9,293)	(14,824)
Total classified loans, net government guarantees	$137	$483	$523	$365	$3,592	$7,241	$12,341

Aging of Contractually Past Due Loans

The following tables present an aging of contractually past due loans as of the periods presented:


(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, 2023
Commercial & industrial loans	$238	$—	$449	$687	$363,422	$364,109	$—
Commercial real estate:
Owner occupied properties	—	129	293	422	342,740	343,162	—
Non-owner occupied and multifamily properties	236	—	—	236	472,991	473,227	—
Residential real estate:
1-4 family residential properties secured by first liens	134	—	62	196	112,018	112,214	—
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	—	—	165	165	22,862	23,027	—
1-4 family residential construction loans	—	—	109	109	40,543	40,652	—
Other construction, land development and raw land loans	308	—	1,545	1,853	89,859	91,712	—
Obligations of states and political subdivisions in the US	—	—	—	—	42,257	42,257	—
Agricultural production, including commercial fishing	—	—	—	—	37,429	37,429	—
Consumer loans	15	—	—	15	4,646	4,661	—
Other loans	—	—	—	—	2,737	2,737	—
Total	$931	$129	$2,623	$3,683	$1,531,504	$1,535,187	$—
December 31, 2022
Commercial & industrial loans	$37	$521	$56	$614	$357,514	$358,128	$—
Commercial real estate:
Owner occupied properties	—	—	798	798	349,175	349,973	—
Non-owner occupied and multifamily properties	—	—	274	274	481,996	482,270	—
Residential real estate:
1-4 family residential properties secured by first liens	60	79	72	211	73,170	73,381	—
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	112	—	127	239	20,020	20,259	—
1-4 family residential construction loans	—	—	109	109	43,891	44,000	—
Other construction, land development and raw land loans	—	—	1,545	1,545	97,637	99,182	—
Obligations of states and political subdivisions in the US	—	—	—	—	32,539	32,539	—
Agricultural production, including commercial fishing	—	—	—	—	34,099	34,099	—
Consumer loans	6	80	—	86	4,249	4,335	—
Other loans	—	—	—	—	3,619	3,619	—
Total	$215	$680	$2,981	$3,876	$1,497,909	$1,501,785	$—

Loans on Nonaccrual Status

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

status for the periods presented for which there was no related ACL. All loans with no ACL are individually evaluated for credit losses in the Company's Current Expected Credit Losses methodology.


	March 31, 2023		December 31, 2022
(In Thousands)	Nonaccrual	Nonaccrual With No ACL	Nonaccrual	Nonaccrual With No ACL

Commercial & industrial loans	$5,820	$2,997	$3,294	$3,287
Commercial real estate:
Owner occupied properties	919	919	1,457	1,457
Non-owner occupied and multifamily properties	—	—	274	274
Residential real estate:
1-4 family residential properties secured by first liens	143	138	151	144
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	239	193	246	198
1-4 family residential construction loans	109	109	109	109
Other construction, land development and raw land loans	1,545	1,545	1,545	1,545




Total nonaccrual loans	8,775	5,901	7,076	7,014
Government guarantees on nonaccrual loans	(2,692)	(152)	(646)	(646)
Net nonaccrual loans	$6,083	$5,749	$6,430	$6,368

Troubled Debt Restructured Loans

As of March 31, 2023 and December 31, 2022, the Company has made the following types of loan modifications related to COVID-19, which are not classified as TDRs principal balance outstanding of:


Loan Modifications due to COVID-19 as of March 31, 2023 and December 31, 2022
(Dollars in thousands)	Interest Only	Full Payment Deferral	Total
Portfolio loans	$999	$—	$999
Number of modifications	1	—	1