Loans and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2024

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:


	June 30, 2024			December 31, 2023
(In Thousands)	Amortized Cost	Unpaid Principal	Difference	Amortized Cost	Unpaid Principal	Difference
Commercial & industrial loans	$415,931	$417,858	($1,927)	$411,387	$413,293	($1,906)
Commercial real estate:
Owner occupied properties	382,050	383,832	(1,782)	366,741	368,357	(1,616)
Non-owner occupied and multifamily properties	547,488	551,130	(3,642)	515,528	519,115	(3,587)
Residential real estate:
1-4 family residential properties secured by first liens	222,488	222,026	462	203,738	203,534	204
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	41,500	41,258	242	33,996	33,783	213
1-4 family residential construction loans	29,281	29,510	(229)	30,976	31,239	(263)
Other construction, land development and raw land loans	152,767	154,009	(1,242)	148,373	149,788	(1,415)
Obligations of states and political subdivisions in the US	29,671	29,673	(2)	30,407	30,409	(2)
Agricultural production, including commercial fishing	45,079	45,320	(241)	41,007	41,237	(230)
Consumer loans	6,743	6,679	64	6,241	6,180	61
Other loans	2,909	2,930	(21)	1,103	1,118	(15)
Total	1,875,907	1,884,225	(8,318)	1,789,497	1,798,053	(8,556)
Allowance for credit losses	(17,694)			(17,270)
	$1,858,213	$1,884,225	($8,318)	$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 June 30,	Beginning Balance	Credit Loss Expense (Benefit)	Charge-offs	Recoveries	Ending Balance
	(In Thousands)
2024
Commercial & industrial loans	$4,052	($22)	$—	$17	$4,047
Commercial real estate:
Owner occupied properties	2,893	70	—	—	2,963
Non-owner occupied and multifamily properties	3,419	80	—	—	3,499
Residential real estate:
1-4 family residential properties secured by first liens	3,425	64	—	—	3,489
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	581	80	—	4	665
1-4 family residential construction loans	159	21	—	—	180
Other construction, land development and raw land loans	2,675	(149)	—	—	2,526
Obligations of states and political subdivisions in the US	105	(5)	—	—	100
Agricultural production, including commercial fishing	156	(4)	—	5	157
Consumer loans	60	1	—	—	61
Other loans	8	(1)	—	—	7
Total	$17,533	$135	$—	$26	$17,694
2023
Commercial & industrial loans	$3,080	$366	($49)	$21	$3,418
Commercial real estate:
Owner occupied properties	2,778	29	—	—	2,807
Non-owner occupied and multifamily properties	3,174	86	—	—	3,260
Residential real estate:
1-4 family residential properties secured by first liens	2,226	980	—	—	3,206
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	392	26	—	5	423
1-4 family residential construction loans	260	(54)	—	—	206
Other construction, land development and raw land loans	1,925	71	—	—	1,996
Obligations of states and political subdivisions in the US	106	(18)	—	—	88
Agricultural production, including commercial fishing	150	12	—	—	162
Consumer loans	61	12	—	1	74
Other loans	5	—	—	—	5
Total	$14,157	$1,510	($49)	$27	$15,645


Six Months Ended June 30,	Beginning Balance	Credit Loss Expense (Benefit)	Charge-offs	Recoveries	Ending Balance
	(In Thousands)
2024
Commercial & industrial loans	$3,438	$532	$—	$77	$4,047
Commercial real estate:
Owner occupied properties	2,867	96	—	—	2,963
Non-owner occupied and multifamily properties	3,294	205	—	—	3,499
Residential real estate:
1-4 family residential properties secured by first liens	3,470	19	—	—	3,489
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	551	104	—	10	665
1-4 family residential construction loans	191	(11)	—	—	180
Other construction, land development and raw land loans	3,127	(601)	—	—	2,526
Obligations of states and political subdivisions in the US	80	20	—	—	100
Agricultural production, including commercial fishing	168	9	(25)	5	157
Consumer loans	81	(21)	—	1	61
Other loans	3	4	—	—	7
Total	$17,270	$356	($25)	$93	$17,694
2023
Commercial & industrial loans	$2,914	$467	($49)	$86	$3,418
Commercial real estate:
Owner occupied properties	3,094	(287)	—	—	2,807
Non-owner occupied and multifamily properties	3,615	(355)	—	—	3,260
Residential real estate:
1-4 family residential properties secured by first liens	1,413	1,793	—	—	3,206
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	389	22	—	12	423
1-4 family residential construction loans	312	(106)	—	—	206
Other construction, land development and raw land loans	1,803	193	—	—	1,996
Obligations of states and political subdivisions in the US	79	9	—	—	88
Agricultural production, including commercial fishing	145	17	—	—	162
Consumer loans	68	17	(14)	3	74
Other loans	6	(1)	—	—	5
Total	$13,838	$1,769	($63)	$101	$15,645

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:


Six Months Ended June 30,

(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.


June 30, 2024	2024	2023	2022	2021	2020	Prior	Total
	(In Thousands)
Commercial & industrial loans
Pass	$64,413	$78,672	$103,490	$48,862	$17,388	$57,242	$370,067
Classified	344	4,676	16,918	15,735	6,178	2,013	45,864
Total commercial & industrial loans	$64,757	$83,348	$120,408	$64,597	$23,566	$59,255	$415,931

Commercial real estate:
Owner occupied properties
Pass	$17,609	$43,546	$77,465	$67,033	$78,768	$95,049	$379,470
Classified	—	—	492	—	358	1,730	2,580


Total commercial real estate owner occupied properties	$17,609	$43,546	$77,957	$67,033	$79,126	$96,779	$382,050

Non-owner occupied and multifamily properties
Pass	$25,950	$63,898	$108,205	$77,767	$66,823	$193,723	$536,366
Classified	—	—	1,167	—	—	9,955	11,122
Total commercial real estate non-owner occupied and multifamily properties	$25,950	$63,898	$109,372	$77,767	$66,823	$203,678	$547,488

Residential real estate:
1-4 family residential properties secured by first liens
Pass	$24,144	$135,976	$46,441	$3,935	$3,954	$7,320	$221,770
Classified	—	544	—	—	—	174	718
Total residential real estate 1-4 family residential properties secured by first liens	$24,144	$136,520	$46,441	$3,935	$3,954	$7,494	$222,488

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens
Pass	$8,452	$15,066	$5,677	$2,935	$2,028	$6,649	$40,807
Classified	—	372	—	—	—	321	693
Total residential real estate 1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	$8,452	$15,438	$5,677	$2,935	$2,028	$6,970	$41,500

1-4 family residential construction loans
Pass	$15,414	$7,588	$2,730	$—	$—	$3,443	$29,175
Classified	—	—	—	—	—	106	106
Total residential real estate 1-4 family residential construction loans	$15,414	$7,588	$2,730	$—	$—	$3,549	$29,281

Other construction, land development and raw land loans
Pass	$15,089	$53,727	$49,235	$25,769	$1,704	$5,451	$150,975
Classified	—	—	—	32	—	1,760	1,792
Total other construction, land development and raw land loans	$15,089	$53,727	$49,235	$25,801	$1,704	$7,211	$152,767

Obligations of states and political subdivisions in the US
Pass	$—	$—	$29,648	$—	$—	$23	$29,671
Classified	—	—	—	—	—	—	—
Total obligations of states and political subdivisions in the US	$—	$—	$29,648	$—	$—	$23	$29,671

Agricultural production, including commercial fishing
Pass	$5,211	$9,055	$8,982	$16,443	$3,287	$2,101	$45,079
Classified	—	—	—	—	—	—	—
Total agricultural production, including commercial fishing	$5,211	$9,055	$8,982	$16,443	$3,287	$2,101	$45,079

Consumer loans
Pass	$1,547	$2,793	$833	$95	$327	$1,146	$6,741
Classified	2	—	—	—	—	—	2
Total consumer loans	$1,549	$2,793	$833	$95	$327	$1,146	$6,743

Other loans
Pass	$488	$359	$150	$296	$1,320	$296	$2,909
Classified	—	—	—	—	—	—	—
Total other loans	$488	$359	$150	$296	$1,320	$296	$2,909

Total loans
Pass	$178,317	$410,680	$432,856	$243,135	$175,599	$372,443	$1,813,030
Classified	346	5,592	18,577	15,767	6,536	16,059	62,877
Total loans	$178,663	$416,272	$451,433	$258,902	$182,135	$388,502	$1,875,907

Total pass loans	$178,317	$410,680	$432,856	$243,135	$175,599	$372,443	$1,813,030
Government guarantees	(24,829)	(5,293)	(8,343)	(16,724)	(1,946)	(19,472)	(76,607)
Total pass loans, net of government guarantees	$153,488	$405,387	$424,513	$226,411	$173,653	$352,971	$1,736,423

Total classified loans	$346	$5,592	$18,577	$15,767	$6,536	$16,059	$62,877


Government guarantees	—	(2,276)	(16,622)	(14,162)	(5,882)	(7,965)	(46,907)
Total classified loans, net government guarantees	$346	$3,316	$1,955	$1,605	$654	$8,094	$15,970


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
June 30, 2024
Commercial & industrial loans	$295	$—	$—	$295	$415,636	$415,931	$—
Commercial real estate:
Owner occupied properties	—	—	—	—	382,050	382,050	—
Non-owner occupied and multifamily properties	—	—	—	—	547,488	547,488	—
Residential real estate:
1-4 family residential properties secured by first liens	42	—	216	258	222,230	222,488	—
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	44	372	54	470	41,030	41,500	17
1-4 family residential construction loans	—	—	—	—	29,281	29,281	—
Other construction, land development and raw land loans	170	—	—	170	152,597	152,767	—
Obligations of states and political subdivisions in the US	—	—	—	—	29,671	29,671	—
Agricultural production, including commercial fishing	—	—	—	—	45,079	45,079	—
Consumer loans	14	2	—	16	6,727	6,743	—
Other loans	—	—	—	—	2,909	2,909	—
Total	$565	$374	$270	$1,209	$1,874,698	$1,875,907	$17
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.


	June 30, 2024		December 31, 2023
(In Thousands)	Nonaccrual	Nonaccrual With No ACL	Nonaccrual	Nonaccrual With No ACL

Commercial & industrial loans	$2,516	$2,221	$3,655	$3,651
Commercial real estate:
Owner occupied properties	242	242	271	260
Non-owner occupied and multifamily properties	—	—	—	—
Residential real estate:
1-4 family residential properties secured by first liens	253	—	270	224
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	201	108	219	176
1-4 family residential construction loans	106	106	109	109
Other construction, land development and raw land loans	1,512	1,512	1,545	1,545




Total nonaccrual loans	4,830	4,189	6,069	5,965
Government guarantees on nonaccrual loans	—	—	(1,067)	(1,067)
Net nonaccrual loans	$4,830	$4,189	$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 June 30, 2024

Term Modification

Payment Modification

Total Modifications

Percentage of Class of Financing Receivable

(In Thousands)

Commercial & industrial loans

$—

—

Total

$—

—


	Three Months Ended June 30, 2023
	Term Modification	Payment Modification	Total Modifications	Percentage of Class of Financing Receivable
(In Thousands)
Commercial & industrial loans	$2,468	$1,988	$4,456	1.06	%












Total	$2,468	$1,988	$4,456	—	%


	Six Months Ended June 30, 2024
	Term Modification	Term and payment modifications	Total Modifications	Percentage of Class of Financing Receivable
(In Thousands)
Commercial & industrial loans	$5,396	$265	$5,661	1.36	%












Total	$5,396	$265	$5,661	0.30	%


	Six Months Ended June 30, 2023
	Term Modification	Term and payment modifications	Total Modifications	Percentage of Class of Financing Receivable
(In Thousands)
Commercial & industrial loans	$2,468	$1,988	$4,456	1.06	%












Total	$2,468	$1,988	$4,456	—	%

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 June 30, 2024
	Principal Forgiveness	Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (months)
(In Thousands)
Commercial & industrial loans	$—	—	%	0


	Three Months Ended June 30, 2023
	Principal Forgiveness	Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (months)
(In Thousands)
Commercial & industrial loans	$—	—	%	3


	Six Months Ended June 30, 2024
	Principal Forgiveness	Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (months)
(In Thousands)
Commercial & industrial loans	$—	8	%	7


	Six Months Ended June 30, 2023
	Principal Forgiveness	Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (months)
(In Thousands)
Commercial & industrial loans	$—	—	%	3

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 June 30, 2024	Six Months Ended June 30, 2024
	Term modification	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 as of the date indicated:


	June 30, 2024
	Greater Than 89 Days Past Due	Total Past Due	Current	Total
(In Thousands)
Commercial & industrial loans	$—	$—	$5,394	$5,394
Commercial real estate:
Owner occupied properties	—	—	242	242

Residential real estate:

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	—	—	108	108
1-4 family residential construction loans	—	—	106	106
Other construction, land development and raw land loans	—	—	1,512	1,512




Total	$—	$—	$7,362	$7,362


	June 30, 2023
	Greater Than 89 Days Past Due	Total Past Due	Current	Total
(In Thousands)
Commercial & industrial loans	$—	$—	$4,456	$4,456












Total	$—	$—	$4,456	$4,456