Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2024

Receivables [Abstract]

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 Current Expected Credit Losses (“CECL”) methodology to assess credit risk, for the periods indicated:

	March 31, 2024			December 31, 2023
(In Thousands)	Amortized Cost	Unpaid Principal	Difference	Amortized Cost	Unpaid Principal	Difference
Commercial & industrial loans	$396,994	$398,734	($1,740)	$411,387	$413,293	($1,906)
Commercial real estate:
Owner occupied properties	370,899	372,507	(1,608)	366,741	368,357	(1,616)
Non-owner occupied and multifamily properties	526,269	529,904	(3,635)	515,528	519,115	(3,587)
Residential real estate:
1-4 family residential properties secured by first liens	218,848	218,552	296	203,738	203,534	204
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	35,683	35,460	223	33,996	33,783	213
1-4 family residential construction loans	27,538	27,751	(213)	30,976	31,239	(263)
Other construction, land development and raw land loans	152,162	153,537	(1,375)	148,373	149,788	(1,415)
Obligations of states and political subdivisions in the US	30,254	30,256	(2)	30,407	30,409	(2)
Agricultural production, including commercial fishing	43,457	43,691	(234)	41,007	41,237	(230)
Consumer loans	6,506	6,444	62	6,241	6,180	61
Other loans	2,525	2,539	(14)	1,103	1,118	(15)
Total	1,811,135	1,819,375	(8,240)	1,789,497	1,798,053	(8,556)
Allowance for credit losses	(17,533)			(17,270)
	$1,793,602	$1,819,375	($8,240)	$1,772,227	$1,798,053	($8,556)

Allowance for Credit Losses

The table below presents activity in the ACL related to loans held for investment for the periods indicated.

Three Months Ended March 31,	Beginning Balance	Credit Loss Expense (Benefit)	Charge-offs	Recoveries	Ending Balance
	(In Thousands)
2024
Commercial & industrial loans	$3,438	$554	$—	$60	$4,052
Commercial real estate:
Owner occupied properties	2,867	26	—	—	2,893
Non-owner occupied and multifamily properties	3,294	125	—	—	3,419
Residential real estate:
1-4 family residential properties secured by first liens	3,470	(45)	—	—	3,425
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	551	24	—	6	581
1-4 family residential construction loans	191	(32)	—	—	159
Other construction, land development and raw land loans	3,127	(452)	—	—	2,675
Obligations of states and political subdivisions in the US	80	25	—	—	105
Agricultural production, including commercial fishing	168	13	(25)	—	156
Consumer loans	81	(22)	—	1	60
Other loans	3	5	—	—	8
Total	$17,270	$221	($25)	$67	$17,533
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

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

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

Three Months Ended March 31,
(In Thousands)	2024	2023	2022	2021	2020	Prior	Total
2024
Agricultural production, including commercial fishing	$—	$—	$25	$—	$—	$—	$25
Total	$—	$—	$25	$—	$—	$—	$25

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, 2024	2024	2023	2022	2021	2020	Prior	Total
	(In Thousands)
Commercial & industrial loans
Pass	$26,618	$80,130	$116,565	$52,354	$17,981	$54,367	$348,015
Classified	—	4,720	16,724	16,142	6,680	4,713	48,979
Total commercial & industrial loans	$26,618	$84,850	$133,289	$68,496	$24,661	$59,080	$396,994
Commercial real estate:
Owner occupied properties
Pass	$8,789	$40,600	$74,470	$67,955	$77,955	$98,298	$368,067
Classified	—	—	—	—	1,077	1,755	2,832

Total commercial real estate owner occupied properties	$8,789	$40,600	$74,470	$67,955	$79,032	$100,053	$370,899
Non-owner occupied and multifamily properties
Pass	$495	$70,381	$101,431	$81,751	$67,463	$193,613	$515,134
Classified	—	—	1,171	—	—	9,964	11,135
Total commercial real estate non-owner occupied and multifamily properties	$495	$70,381	$102,602	$81,751	$67,463	$203,577	$526,269
Residential real estate:
1-4 family residential properties secured by first liens
Pass	$17,605	$138,692	$46,936	$3,927	$4,009	$7,372	$218,541
Classified	—	221	—	—	—	86	307
Total residential real estate 1-4 family residential properties secured by first liens	$17,605	$138,913	$46,936	$3,927	$4,009	$7,458	$218,848
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens
Pass	$2,886	$14,590	$5,772	$3,167	$1,982	$6,955	$35,352
Classified	—	—	—	—	—	331	331
Total residential real estate 1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	$2,886	$14,590	$5,772	$3,167	$1,982	$7,286	$35,683
1-4 family residential construction loans
Pass	$4,395	$14,217	$3,914	$—	$—	$4,903	$27,429
Classified	—	—	—	—	—	109	109
Total residential real estate 1-4 family residential construction loans	$4,395	$14,217	$3,914	$—	$—	$5,012	$27,538
Other construction, land development and raw land loans
Pass	$4,354	$51,057	$54,956	$28,979	$1,748	$9,329	$150,423
Classified	—	—	—	—	—	1,739	1,739
Total other construction, land development and raw land loans	$4,354	$51,057	$54,956	$28,979	$1,748	$11,068	$152,162
Obligations of states and political subdivisions in the US
Pass	$—	$—	$30,197	$—	$—	$57	$30,254
Classified	—	—	—	—	—	—	—
Total obligations of states and political subdivisions in the US	$—	$—	$30,197	$—	$—	$57	$30,254
Agricultural production, including commercial fishing
Pass	$2,112	$9,109	$9,581	$17,138	$3,356	$2,161	$43,457
Classified	—	—	—	—	—	—	—
Total agricultural production, including commercial fishing	$2,112	$9,109	$9,581	$17,138	$3,356	$2,161	$43,457
Consumer loans
Pass	$865	$3,025	$906	$115	$345	$1,250	$6,506
Classified	—	—	—	—	—	—	—
Total consumer loans	$865	$3,025	$906	$115	$345	$1,250	$6,506
Other loans
Pass	$49	$366	$163	$302	$1,339	$306	$2,525
Classified	—	—	—	—	—	—	—
Total other loans	$49	$366	$163	$302	$1,339	$306	$2,525
Total loans
Pass	$68,168	$422,167	$444,891	$255,688	$176,178	$378,611	$1,745,703
Classified	—	4,941	17,895	16,142	7,757	18,697	65,432
Total loans	$68,168	$427,108	$462,786	$271,830	$183,935	$397,308	$1,811,135
Total pass loans	$68,168	$422,167	$444,891	$255,688	$176,178	$378,611	$1,745,703
Government guarantees	(1,534)	(5,320)	(8,376)	(19,281)	(2,120)	(19,494)	(56,125)
Total pass loans, net of government guarantees	$66,634	$416,847	$436,515	$236,407	$174,058	$359,117	$1,689,578
Total classified loans	$—	$4,941	$17,895	$16,142	$7,757	$18,697	$65,432

Government guarantees	—	(2,320)	(16,724)	(14,528)	(6,714)	(7,964)	(48,250)
Total classified loans, net government guarantees	$—	$2,621	$1,171	$1,614	$1,043	$10,733	$17,182

December 31, 2023	2023	2022	2021	2020	2019	Prior	Total
	(In Thousands)
Commercial & industrial loans
Pass	$97,377	$123,874	$58,708	$24,177	$13,990	$44,674	$362,800
Classified	3,319	18,790	16,964	7,032	56	2,426	48,587
Total commercial & industrial loans	$100,696	$142,664	$75,672	$31,209	$14,046	$47,100	$411,387
Commercial real estate:
Owner occupied properties
Pass	$40,745	$70,925	$69,316	$82,339	$28,588	$71,930	$363,843
Classified	—	—	—	1,115	—	1,783	2,898
Total commercial real estate owner occupied properties	$40,745	$70,925	$69,316	$83,454	$28,588	$73,713	$366,741
Non-owner occupied and multifamily properties
Pass	$59,990	$96,532	$83,277	$67,037	$56,192	$143,619	$506,647
Classified	—	—	—	—	—	8,881	8,881
Total commercial real estate non-owner occupied and multifamily properties	$59,990	$96,532	$83,277	$67,037	$56,192	$152,500	$515,528
Residential real estate:
1-4 family residential properties secured by first liens
Pass	$139,829	$47,775	$4,119	$4,070	$2,240	$5,388	$203,421
Classified	224	—	—	—	—	93	317
Total residential real estate 1-4 family residential properties secured by first liens	$140,053	$47,775	$4,119	$4,070	$2,240	$5,481	$203,738
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens
Pass	$16,145	$5,417	$3,331	$1,906	$2,277	$4,581	$33,657
Classified	—	—	—		—	339	339
Total residential real estate 1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	$16,145	$5,417	$3,331	$1,906	$2,277	$4,920	$33,996
1-4 family residential construction loans
Pass	$16,845	$4,469	$—	$—	$—	$9,553	$30,867
Classified	—	—	—	—	—	109	109
Total residential real estate 1-4 family residential construction loans	$16,845	$4,469	$—	$—	$—	$9,662	$30,976
Other construction, land development and raw land loans
Pass	$42,615	$58,714	$32,780	$1,982	$1,454	$7,896	$145,441
Classified	—	1,175	—	—	—	1,757	2,932
Total other construction, land development and raw land loans	$42,615	$59,889	$32,780	$1,982	$1,454	$9,653	$148,373
Obligations of states and political subdivisions in the US
Pass	$—	$30,317	$—	$—	$—	$90	$30,407
Classified	—	—	—	—	—	—	—
Total obligations of states and political subdivisions in the US	$—	$30,317	$—	$—	$—	$90	$30,407
Agricultural production, including commercial fishing
Pass	$8,643	$9,649	$17,061	$3,465	$524	$1,665	$41,007
Classified	—	—	—	—	—	—	—
Total agricultural production, including commercial fishing	$8,643	$9,649	$17,061	$3,465	$524	$1,665	$41,007
Consumer loans
Pass	$3,396	$983	$209	$368	$258	$1,026	$6,240
Classified	1	—	—	—	—	—	1

Total consumer loans	$3,397	$983	$209	$368	$258	$1,026	$6,241
Other loans
Pass	$160	$77	$135	$592	$138	$1	$1,103
Classified	—	—	—	—	—	—	—
Total other loans	$160	$77	$135	$592	$138	$1	$1,103
Total loans
Pass	$425,745	$448,732	$268,936	$185,936	$105,661	$290,423	$1,725,433
Classified	3,544	19,965	16,964	8,147	56	15,388	64,064
Total loans	$429,289	$468,697	$285,900	$194,083	$105,717	$305,811	$1,789,497
Total pass loans	$425,745	$448,732	$268,936	$185,936	$105,661	$290,423	$1,725,433
Government guarantees	(2,792)	(8,409)	(19,305)	(2,295)	(12,133)	(7,696)	(52,630)
Total pass loans, net of government guarantees	$422,953	$440,323	$249,631	$183,641	$93,528	$282,727	$1,672,803
Total classified loans	$3,544	$19,965	$16,964	$8,147	$56	$15,388	$64,064
Government guarantees	—	(16,805)	(15,268)	(7,043)	—	(11,311)	(50,427)
Total classified loans, net government guarantees	$3,544	$3,160	$1,696	$1,104	$56	$4,077	$13,637

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, 2024
Commercial & industrial loans	$—	$—	$297	$297	$396,697	$396,994	$—
Commercial real estate:
Owner occupied properties	155	—	—	155	370,744	370,899	—
Non-owner occupied and multifamily properties	—	—	—	—	526,269	526,269	—
Residential real estate:
1-4 family residential properties secured by first liens	426	—	221	647	218,201	218,848	—
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	—	17	153	170	35,513	35,683	—
1-4 family residential construction loans	—	—	109	109	27,429	27,538	—
Other construction, land development and raw land loans		—	968	968	151,194	152,162	—
Obligations of states and political subdivisions in the US	—	—	—	—	30,254	30,254	—
Agricultural production, including commercial fishing	—	—	—	—	43,457	43,457	—
Consumer loans	2	—	—	2	6,504	6,506	—
Other loans	—	—	—	—	2,525	2,525	—
Total	$583	$17	$1,748	$2,348	$1,808,787	$1,811,135	$—
December 31, 2023
Commercial & industrial loans	$326	$148	$1,253	$1,727	$409,660	$411,387	$—
Commercial real estate:
Owner occupied properties	—	—	260	260	366,481	366,741	—
Non-owner occupied and multifamily properties	—	—	—	—	515,528	515,528	—
Residential real estate:
1-4 family residential properties secured by first liens	458	—	224	682	203,056	203,738	—
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	53	—	155	208	33,788	33,996	—
1-4 family residential construction loans	—	—	109	109	30,867	30,976	—
Other construction, land development and raw land loans	—	—	1,545	1,545	146,828	148,373	—
Obligations of states and political subdivisions in the US	—	—	—	—	30,407	30,407	—
Agricultural production, including commercial fishing	—	—	—	—	41,007	41,007	—
Consumer loans	18	1	—	19	6,222	6,241	—
Other loans	—	—	—	—	1,103	1,103	—
Total	$855	$149	$3,546	$4,550	$1,784,947	$1,789,497	$—

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 CECL methodology.

	March 31, 2024		December 31, 2023
(In  Thousands)	Nonaccrual	Nonaccrual With No ACL	Nonaccrual	Nonaccrual With No ACL
Commercial & industrial loans	$2,884	$2,358	$3,655	$3,651
Commercial real estate:
Owner occupied properties	253	253	271	260
Non-owner occupied and multifamily properties	—	—	—	—
Residential real estate:
1-4 family residential properties secured by first liens	263	221	270	224
1-4 family residential properties secured by junior liens       and revolving secured by 1-4 family first liens	211	170	219	176
1-4 family residential construction loans	109	109	109	109
Other construction, land development and raw land loans	1,540	1,540	1,545	1,545
Total nonaccrual loans	5,260	4,651	6,069	5,965
Government guarantees on nonaccrual loans	—	—	(1,067)	(1,067)
Net nonaccrual loans	$5,260	$4,651	$5,002	$4,898

Financing Receivable, Modified

The percentage of the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty as compared to the amortized cost basis of each class of financing receivable is also presented below:

	Three Months Ended March 31, 2024
	Term Modification	Payment Modification	Term and payment modifications	Total Modifications	Percentage of Class of Financing Receivable
(In Thousands)
Commercial & industrial loans	$5,396	$—	$265	$5,661	1.43	%
Total	$5,396	$—	$265	$5,661	0.31	%

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty as of the dates indicated:

	Three Months Ended March 31, 2024
	Principal Forgiveness	Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (months)
(In Thousands)
Commercial & industrial loans	$—	8	%	7

The following table presents the amortized cost basis of loans that had a payment default during the period indicated and were modified in the twelve months before default to borrowers experiencing financial difficulty:

	Three Months Ended March 31, 2024
	Term modification
(In Thousands)
Residential real estate:
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	$112
1-4 family residential construction loans	109
Other construction, land development and raw land loans	968
Total	$1,189

The following table presents the payment performance of loans that have been modified in the last twelve months:

	March 31, 2024
	Greater Than 89 Days Past Due	Total Past Due	Current	Total
(In Thousands)
Commercial & industrial loans	$—	$—	$7,633	$7,633
Commercial real estate:
Owner occupied properties	—	—	253	253
Residential real estate:
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	112	112	—	112
1-4 family residential construction loans	109	109	—	109
Other construction, land development and raw land loans	968	968	572	1,540
Total	$1,189	$1,189	$8,458	$9,647