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Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 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:


	September 30, 2024			December 31, 2023
(In Thousands)	Amortized Cost	Unpaid Principal	Difference	Amortized Cost	Unpaid Principal	Difference
Commercial & industrial loans	$414,201	$416,184	($1,983)	$411,387	$413,293	($1,906)
Commercial real estate:
Owner occupied properties	410,924	412,827	(1,903)	366,741	368,357	(1,616)
Non-owner occupied and multifamily properties	580,702	584,302	(3,600)	515,528	519,115	(3,587)
Residential real estate:
1-4 family residential properties secured by first liens	248,906	248,514	392	203,738	203,534	204
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	45,531	45,262	269	33,996	33,783	213
1-4 family residential construction loans	39,557	39,794	(237)	30,976	31,239	(263)
Other construction, land development and raw land loans	183,849	185,362	(1,513)	148,373	149,788	(1,415)
Obligations of states and political subdivisions in the US	29,586	29,582	4	30,407	30,409	(2)
Agricultural production, including commercial fishing	44,489	44,719	(230)	41,007	41,237	(230)
Consumer loans	7,907	7,836	71	6,241	6,180	61
Other loans	1,913	1,929	(16)	1,103	1,118	(15)
Total	2,007,565	2,016,311	(8,746)	1,789,497	1,798,053	(8,556)
Allowance for credit losses	(19,528)			(17,270)
Net loans	$1,988,037	$2,016,311	($8,746)	$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 September 30,	Beginning Balance	Credit Loss Expense (Benefit)	Charge-offs	Recoveries	Ending Balance
	(In Thousands)
2024
Commercial & industrial loans	$4,047	$153	$—	$104	$4,304
Commercial real estate:
Owner occupied properties	2,963	(42)	—	—	2,921
Non-owner occupied and multifamily properties	3,499	273	—	—	3,772
Residential real estate:
1-4 family residential properties secured by first liens	3,489	571	—	—	4,060
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	665	62	—	6	733
1-4 family residential construction loans	180	62	—	—	242
Other construction, land development and raw land loans	2,526	639	—	—	3,165
Obligations of states and political subdivisions in the US	100	—	—	—	100
Agricultural production, including commercial fishing	157	(3)	—	1	155
Consumer loans	61	25	(15)	—	71
Other loans	7	(2)	—	—	5
Total	$17,694	$1,738	($15)	$111	$19,528
2023
Commercial & industrial loans	$3,418	($55)	($91)	$181	$3,453
Commercial real estate:
Owner occupied properties	2,807	(15)	—	—	2,792
Non-owner occupied and multifamily properties	3,260	(36)	—	—	3,224
Residential real estate:
1-4 family residential properties secured by first liens	3,206	334	—	—	3,540
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	423	78	—	5	506
1-4 family residential construction loans	206	(31)	—	—	175
Other construction, land development and raw land loans	1,996	480	—	—	2,476
Obligations of states and political subdivisions in the US	88	(11)	—	—	77
Agricultural production, including commercial fishing	162	2	—	—	164
Consumer loans	74	4	—	1	79
Other loans	5	—	—	—	5
Total	$15,645	$750	($91)	$187	$16,491


Nine Months Ended September 30,	Beginning Balance	Credit Loss Expense (Benefit)	Charge-offs	Recoveries	Ending Balance
	(In Thousands)
2024
Commercial & industrial loans	$3,438	$684	$—	$182	$4,304
Commercial real estate:
Owner occupied properties	2,867	54	—	—	2,921
Non-owner occupied and multifamily properties	3,294	478	—	—	3,772
Residential real estate:
1-4 family residential properties secured by first liens	3,470	590	—	—	4,060
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	551	166	—	16	733
1-4 family residential construction loans	191	51	—	—	242
Other construction, land development and raw land loans	3,127	38	—	—	3,165
Obligations of states and political subdivisions in the US	80	20	—	—	100
Agricultural production, including commercial fishing	168	7	(25)	5	155
Consumer loans	81	4	(15)	1	71
Other loans	3	2	—	—	5
Total	$17,270	$2,094	($40)	$204	$19,528
2023
Commercial & industrial loans	$2,914	$412	($140)	$267	$3,453
Commercial real estate:
Owner occupied properties	3,094	(302)	—	—	2,792
Non-owner occupied and multifamily properties	3,615	(391)	—	—	3,224
Residential real estate:
1-4 family residential properties secured by first liens	1,413	2,127	—	—	3,540
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	389	100	—	17	506
1-4 family residential construction loans	312	(137)	—	—	175
Other construction, land development and raw land loans	1,803	673	—	—	2,476
Obligations of states and political subdivisions in the US	79	(2)	—	—	77
Agricultural production, including commercial fishing	145	19	—	—	164
Consumer loans	68	21	(14)	4	79
Other loans	6	(1)	—	—	5
Total	$13,838	$2,519	($154)	$288	$16,491

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:


Nine Months Ended September 30,

(In Thousands)	2024	2023	2022	2021	2020	Prior	Total
2024










Agricultural production, including commercial fishing	$—	$—	$25	$—	$—	$—	$25
Consumer loans	2	—	13	—	—	—	15

Total	$2	$—	$38	$—	$—	$—	$40

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.


September 30, 2024	2024	2023	2022	2021	2020	Prior	Total
	(In Thousands)
Commercial & industrial loans
Pass	$76,222	$76,864	$109,502	$49,022	$12,403	$47,192	$371,205
Classified	343	3,432	16,909	14,486	5,970	1,856	42,996
Total commercial & industrial loans	$76,565	$80,296	$126,411	$63,508	$18,373	$49,048	$414,201

Commercial real estate:
Owner occupied properties
Pass	$50,326	$44,030	$75,406	$67,083	$82,326	$89,244	$408,415


Classified	—	—	492	—	309	1,708	2,509
Total commercial real estate owner occupied properties	$50,326	$44,030	$75,898	$67,083	$82,635	$90,952	$410,924

Non-owner occupied and multifamily properties
Pass	$73,602	$62,978	$106,614	$73,736	$65,785	$186,867	$569,582
Classified	—	—	1,173	—	—	9,947	11,120
Total commercial real estate non-owner occupied and multifamily properties	$73,602	$62,978	$107,787	$73,736	$65,785	$196,814	$580,702

Residential real estate:
1-4 family residential properties secured by first liens
Pass	$78,006	$111,302	$44,312	$3,482	$4,306	$7,125	$248,533
Classified	—	210	—	—	—	163	373
Total residential real estate 1-4 family residential properties secured by first liens	$78,006	$111,512	$44,312	$3,482	$4,306	$7,288	$248,906

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens
Pass	$13,273	$14,555	$5,353	$2,766	$2,266	$6,639	$44,852
Classified	—	372	—	—	—	307	679
Total residential real estate 1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	$13,273	$14,927	$5,353	$2,766	$2,266	$6,946	$45,531

1-4 family residential construction loans
Pass	$25,853	$6,374	$2,263	$—	$—	$4,968	$39,458
Classified	—	—	—	—	—	99	99
Total residential real estate 1-4 family residential construction loans	$25,853	$6,374	$2,263	$—	$—	$5,067	$39,557

Other construction, land development and raw land loans
Pass	$34,183	$61,339	$51,346	$25,525	$1,653	$8,237	$182,283
Classified	—	—	—	31	—	1,535	1,566
Total other construction, land development and raw land loans	$34,183	$61,339	$51,346	$25,556	$1,653	$9,772	$183,849

Obligations of states and political subdivisions in the US
Pass	$—	$—	$29,586	$—	$—	$—	$29,586
Classified	—	—	—	—	—	—	—
Total obligations of states and political subdivisions in the US	$—	$—	$29,586	$—	$—	$—	$29,586

Agricultural production, including commercial fishing
Pass	$5,257	$9,027	$8,764	$16,218	$3,215	$2,008	$44,489
Classified	—	—	—	—	—	—	—
Total agricultural production, including commercial fishing	$5,257	$9,027	$8,764	$16,218	$3,215	$2,008	$44,489

Consumer loans
Pass	$3,008	$2,645	$767	$85	$307	$1,089	$7,901
Classified	—	—	6	—	—	—	6
Total consumer loans	$3,008	$2,645	$773	$85	$307	$1,089	$7,907

Other loans
Pass	$—	$185	$136	$291	$1,301	$—	$1,913
Classified	—	—	—	—	—	—	—
Total other loans	$—	$185	$136	$291	$1,301	$—	$1,913

Total loans
Pass	$359,730	$389,299	$434,049	$238,208	$173,562	$353,369	$1,948,217
Classified	343	4,014	18,580	14,517	6,279	15,615	59,348
Total loans	$360,073	$393,313	$452,629	$252,725	$179,841	$368,984	$2,007,565

Total pass loans	$359,730	$389,299	$434,049	$238,208	$173,562	$353,369	$1,948,217
Government guarantees	(29,546)	(8,948)	(8,114)	(16,033)	(1,767)	(17,742)	(82,150)
Total pass loans, net of government guarantees	$330,184	$380,351	$425,935	$222,175	$171,795	$335,627	$1,866,067


Total classified loans	$343	$4,014	$18,580	$14,517	$6,279	$15,615	$59,348
Government guarantees	—	(1,674)	(14,877)	(13,038)	(5,651)	(7,964)	(43,204)
Total classified loans, net government guarantees	$343	$2,340	$3,703	$1,479	$628	$7,651	$16,144


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
September 30, 2024
Commercial & industrial loans	$325	$2,761	$—	$3,086	$411,115	$414,201	$—
Commercial real estate:
Owner occupied properties	492	—	231	723	410,201	410,924	—
Non-owner occupied and multifamily properties	—	—	—	—	580,702	580,702	—
Residential real estate:
1-4 family residential properties secured by first liens	—	—	210	210	248,696	248,906	—
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	34	134	17	185	45,346	45,531	17
1-4 family residential construction loans	—	—	99	99	39,458	39,557	—
Other construction, land development and raw land loans	—	345	1,128	1,473	182,376	183,849	—
Obligations of states and political subdivisions in the US	—	—	—	—	29,586	29,586	—
Agricultural production, including commercial fishing	—	—	—	—	44,489	44,489	—
Consumer loans	—	—	—	—	7,907	7,907	—
Other loans	—	—	—	—	1,913	1,913	—
Total	$851	$3,240	$1,685	$5,776	$2,001,789	$2,007,565	$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.


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

Commercial & industrial loans	$2,338	$2,092	$3,655	$3,651
Commercial real estate:
Owner occupied properties	231	231	271	260

Residential real estate:
1-4 family residential properties secured by first liens	243	—	270	224
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	559	472	219	176
1-4 family residential construction loans	99	99	109	109
Other construction, land development and raw land loans	1,474	1,474	1,545	1,545




Total nonaccrual loans	4,944	4,368	6,069	5,965
Government guarantees on nonaccrual loans	—	—	(1,067)	(1,067)
Net nonaccrual loans	$4,944	$4,368	$5,002	$4,898

Financing Receivable, Modified

The following table shows the amortized cost basis of the loans that were both experiencing financial difficulty and modified as of the dates indicated, by class and type of modification. 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 September 30, 2024
	Payment Modification	Term and payment modifications	Total Modifications	Percentage of Class of Financing Receivable
(In Thousands)
Commercial & industrial loans	$—	$195	$195	0.05	%



Residential real estate:

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	372	—	372	0.82	%






Total	$372	$195	$567	0.03	%


	Three Months Ended September 30, 2023
	Term Modification	Term and payment modifications	Total Modifications	Percentage of Class of Financing Receivable
(In Thousands)

Commercial real estate:
Owner occupied properties	$—	$271	$271	0.08	%

Residential real estate:

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	119	—	119	0.43	%
1-4 family residential construction loans	109	—	109	0.34	%
Other construction, land development and raw land loans	968	577	1,545	1.29	%




Total	$1,196	$848	$2,044	0.12	%


	Nine Months Ended September 30, 2024
	Term Modification	Term and payment modifications	Total Modifications	Percentage of Class of Financing Receivable
(In Thousands)
Commercial & industrial loans	$4,033	$448	$4,481	1.08	%



Residential real estate:

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	—	—	372	0.82	%






Total	$4,033	$448	$4,853	0.24	%


	Nine Months Ended September 30, 2023
	Term Modification	Payment Modification	Term and payment modifications	Total Modifications	Percentage of Class of Financing Receivable
(In Thousands)
Commercial & industrial loans	$1,511	$1,985	$—	$3,496	0.84	%
Commercial real estate:
Owner occupied properties	—	—	271	271	0.08	%

Residential real estate:

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	119	—	—	119	0.43	%
1-4 family residential construction loans	109	—	—	109	0.34	%
Other construction, land development and raw land loans	968	—	577	1,545	1.29	%




Total	$2,707	$1,985	$848	$5,540	0.32	%

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 September 30, 2024
	Principal Forgiveness	Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (months)
(In Thousands)
Commercial & industrial loans	$—	—	%	73


	Three Months Ended September 30, 2023
	Principal Forgiveness	Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (months)
(In Thousands)

Commercial real estate:
Owner occupied properties	$—	—	%	5

Residential real estate:

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	—	—	%	5
1-4 family residential construction loans	—	—	%	5
Other construction, land development and raw land loans	—	—	%	5


	Nine Months Ended September 30, 2024
	Principal Forgiveness	Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (months)
(In Thousands)
Commercial & industrial loans	$—	8	%	10


	Nine Months Ended September 30, 2023
	Principal Forgiveness	Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (months)
(In Thousands)
Commercial & industrial loans	$—	—	%	20
Commercial real estate:
Owner occupied properties	—	—	%	5

Residential real estate:

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	—	—	%	5
1-4 family residential construction loans	—	—	%	5
Other construction, land development and raw land loans	—	—	%	5

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 September 30, 2024	Nine Months Ended September 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	$—	$100
1-4 family residential construction loans	—	99
Other construction, land development and raw land loans	—	778




Total	$—	$977


	Three Months Ended September 30, 2023
	Term modification	Term and payment modification
(In Thousands)

Commercial real estate:
Owner occupied properties	$—	$271

Residential real estate:

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	119	—
1-4 family residential construction loans	109	—
Other construction, land development and raw land loans	968	577




Total	$1,196	$848

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


	September 30, 2024
	60-89 Days Past Due	Greater Than 89 Days Past Due	Total Past Due	Current	Total
(In Thousands)
Commercial & industrial loans	$—	$—	$—	$4,482	$4,482
Commercial real estate:
Owner occupied properties	—	231	231	—	231

Residential real estate:

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	100	—	100	372	472
1-4 family residential construction loans	—	99	99	—	99
Other construction, land development and raw land loans	345	1,128	1,473	—	1,473




Total	$445	$1,458	$1,903	$4,854	$6,757


	September 30, 2023
	30-59 Days Past Due	Greater Than 89 Days Past Due	Total Past Due	Current	Total
(In Thousands)
Commercial & industrial loans	$1,511	$—	$1,511	$1,985	$3,496
Commercial real estate:
Owner occupied properties	—	271	271	—	271

Residential real estate:

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	—	119	119	—	119
1-4 family residential construction loans	—	109	109	—	109
Other construction, land development and raw land loans	—	1,545	1,545	—	1,545




Total	$—	$2,044	$3,555	$1,985	$5,540