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LOANS HELD FOR INVESTMENT (Tables)
 6 Months Ended
Jun. 30, 2023
LOANS HELD FOR INVESTMENT [Abstract]  
Summary of Loans Held for Investment by Category
Loans held for investment are summarized by category as of the periods presented below (dollars in thousands):

 
June 30,
2023
    
December 31,
2022
  
Commercial real estate
  
$
1,006,909
    
$
919,358
  
Commercial - specialized
    
355,252
      
327,513
  
Commercial - general
    
551,096
      
484,783
  
Consumer:
                
1-4 family residential
    
522,472
      
460,124
  
Auto loans
    
318,126
      
321,476
  
   Other consumer
    
79,795
      
81,308
  
Construction
    
145,413
      
153,519
  
     
2,979,063
      
2,748,081
  
Allowance for credit losses on loans
    
(43,137
)
    
(39,288
)
Loans, net
  
$
2,935,926
    
$
2,708,793
  
Activity in ACL for Loans and Investment in Loans Disaggregated Based on Method of Evaluating Impairment
The following table details the activity in the ACL for loans  for the periods indicated (dollars in thousands). Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

 
Beginning
Balance
    
Provision for
Credit
Losses(1)
    
Charge-offs
    
Recoveries
    
Ending
Balance
  
For the three months ended June 30, 2023
                              
Commercial real estate
  
$
13,381
    
$
1,120
    
$
—
    
$
—
    
$
14,501
  
Commercial - specialized
    
3,510
      
626
      
—
      
18
      
4,154
  
Commercial - general
    
6,267
      
1,478
      
(169
)
    
61
      
7,637
  
Consumer:
                                        
1-4 family residential
    
8,531
      
318
      
—
      
2
      
8,851
  
Auto loans
    
3,714
      
332
      
(157
)
    
11
      
3,900
  
Other consumer
    
1,101
      
155
      
(229
)
    
80
      
1,107
  
Construction
    
3,056
      
(69
)
    
—
      
—
      
2,987
  

 
$
39,560
    
$
3,960
    
$
(555
)
  
$
172
    
$
43,137
  
                                         
For the three months ended June 30, 2022
                                        
Commercial real estate
  
$
14,621
    
$
(1,111
)
  
$
—
    
$
393
    
$
13,903
  
Commercial - specialized
    
3,275
      
71
      
(68
)
    
77
      
3,355
  
Commercial - general
    
9,940
      
(149
)
    
(8
)
    
135
      
9,918
  
Consumer:
                                        
1-4 family residential
    
4,931
      
397
      
—
      
1
      
5,329
  
Auto loans
    
3,681
      
314
      
(69
)
    
32
      
3,958
  
Other consumer
    
1,384
      
250
      
(242
)
    
51
      
1,443
  
Construction
    
1,817
      
228
      
(166
)
    
—
      
1,879
  

 
$
39,649
    
$
—
    
$
(553
)
  
$
689
    
$
39,785
  

(1) The $3.7 million provision for credit loss on the Consolidated Statement of Comprehensive Income (Loss) includes a $4.0 million provision for credit losses on loans and a $(260) thousand provision for off-balance sheet credit exposures for the three months ended June 30, 2023.

 
Beginning
Balance
    
Impact of
CECL
Adoption
    
Provision for
Credit
Losses(1)
    
Charge-offs
    
Recoveries
    
Ending
Balance
  
For the six months ended June 30, 2023
                                    
Commercial real estate
  
$
13,029
     $ 827    
$
645
    
$
—
    
$
—
    
$
14,501
  
Commercial - specialized
    
3,425
       33      
616
      
—
      
80
      
4,154
  
Commercial - general
    
9,215
       (2,574 )    
1,242
      
(369
)
    
123
      
7,637
  
Consumer:
                                                
1-4 family residential
    
6,194
       1,700      
954
      
—
      
3
      
8,851
  
Auto loans
    
3,926
       (332 )    
630
      
(411
)
    
87
      
3,900
  
Other consumer
    
1,376
       (235 )    
220
      
(442
)
    
188
      
1,107
  
Construction
    
2,123
       683      
453
      
(272
)
    
—
      
2,987
  

 
$
39,288
     $ 102    
$
4,760
    
$
(1,494
)
  
$
481
    
$
43,137
  

(1) The $4.7 million provision for credit loss on the Consolidated Statement of Comprehensive Income (Loss) includes a $4.8 million provision for credit losses on loans and a $(50) thousand provision for off-balance sheet credit exposures for the six months ended June 30, 2023.

   
Beginning
Balance
    
Provision for
Credit Losses
     Charge-offs     Recoveries    
Ending
Balance
  
For the six months ended June 30, 2022
                              
Commercial real estate
  
$
17,245
    
$
(3,760
)
  
$
—
    
$
418
    
$
13,903
  
Commercial - specialized
    
4,363
      
(1,013
)
    
(106
)
    
111
      
3,355
  
Commercial - general
    
8,466
      
1,510
      
(315
)
    
257
      
9,918
  
Consumer:
                                        
1-4 family residential
    
5,268
      
99
      
(40
)
    
2
      
5,329
  
Auto loans
    
3,653
      
382
      
(155
)
    
78
      
3,958
  
Other consumer
    
1,357
      
398
      
(428
)
    
116
      
1,443
  
Construction
    
1,746
      
299
      
(166
)
    
—
      
1,879
  
 
$
42,098
    
$
(2,085
)
  
$
(1,210
)
  
$
982
    
$
39,785
  

The following table shows the Company’s amortized cost in loans and related ACL for collateral dependent loans by class using the fair value of collateral loss estimation methodology of evaluating expected credit losses at the date indicated (dollars in thousands).

 
   Real Estate
     Equipment
    
Accounts
Receivable
    
Total Loans
Individually
Evaluated
    
Total ACL
for
Individually
Evaluated
Loans
  
June 30, 2023
                              
Commercial real estate
   $ 175     $ 525     $ 30    
$
730
    
$
—
  
Commercial - specialized
     —       —       —      
—
      
—
  
Commercial - general
     8,179       9,724       162      
18,065
      
1,362
  
Consumer:
                                        
1-4 family residential
     747       1       —      
748
      
83
  
Auto loans
     —       —       —      
—
      
—
  
Other consumer
     —       —       —      
—
      
—
  
Construction
     —       —       —      
—
      
—
  
 
   $
 9,101     $
 10,250     $ 192    
$
19,543
    
$
1,445
  

The following table shows the Company’s investment in loans disaggregated based on the method of evaluating impairment at the date indicated (dollars in thousands):

 
Recorded Investment
    
ACL for Loans
  
   
Individually
Evaluated
    
Collectively
Evaluated
    
Individually
Evaluated
    
Collectively
Evaluated
  
December 31, 2022
                        
Commercial real estate
  
$
—
    
$
919,358
    
$
—
    
$
13,029
  
Commercial - specialized
    
—
      
327,513
      
—
      
3,425
  
Commercial - general
    
3,350
      
481,433
      
22
      
9,193
  
Consumer:
                                
1-4 family residential
    
742
      
459,382
      
18
      
6,176
  
Auto loans
    
—
      
321,476
      
—
      
3,926
  
Other consumer
    
—
      
81,308
      
—
      
1,376
  
Construction
    
1,014
      
152,505
      
245
      
1,878
  

 
$
5,106
    
$
2,742,975
    
$
285
    
$
39,003
  
Impaired Loan Information
Impaired loan information at the date indicated follows (dollars in thousands):

 
Unpaid
Contractual
Principal
Balance
    
Recorded
Investment
With No
Allowance
    
Recorded
Investment
With
Allowance
    
Total
Recorded
Investment
    
Related
Allowance
    
Average
Recorded
Investment
  
                                     
December 31, 2022
                                    
Commercial real estate
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
551
  
Commercial - specialized
    
—
      
—
      
—
      
—
      
—
      
—
  
Commercial - general
    
3,350
      
799
      
2,551
      
3,350
      
22
      
4,214
  
Consumer:
                                                
1-4 family
    
742
      
486
      
256
      
742
      
18
      
1,167
  
Auto loans
    
—
      
—
      
—
      
—
      
—
      
—
  
Other consumer
    
—
      
—
      
—
      
—
      
—
      
—
  
Construction
    
1,014
      
686
      
328
      
1,014
      
245
      
507
  

 
$
5,106
    
$
1,971
    
$
3,135
    
$
5,106
    
$
285
    
$
6,439
  
Age Analysis on Accruing Past-due Loans and Nonaccrual Loans
The table below provides an age analysis on accruing past-due loans and nonaccrual loans at the dates indicated (dollars in thousands):

 
30-89 Days
Past Due
    
90 Days or
More Past
Due
    
Nonaccrual
    
 Nonaccrual
with no
ACL
  
June 30, 2023
                        
Commercial real estate
  
$
65
    
$
91
    
$
—
     $ —  
Commercial - specialized
    
230
      
11
      
249
       —  
Commercial - general
    
335
      
3,352
      
14,078
       —  
Consumer:
                                
1-4 Family residential
    
1,829
      
630
      
1,977
       261  
Auto loans
    
971
      
145
      
—
       —  
Other consumer
    
754
      
249
      
34
       —  
Construction
    
611
      
—
      
223
       —  

 
$
4,795
    
$
4,478
    
$
16,561
     $
 261  

   
30-89 Days
Past Due
    
90 Days or
More Past Due
     Nonaccrual
 
December 31, 2022
                  
Commercial real estate
  
$
342
    
$
27
    
$
—
  
Commercial - specialized
    
25
      
13
      
38
  
Commercial - general
    
1,451
      
60
      
3,357
  
Consumer:
                        
1-4 Family residential
    
1,389
      
1,653
      
1,356
  
Auto loans
    
707
      
85
      
—
  
Other consumer
    
1,487
      
149
      
37
  
Construction
    
550
      
—
      
1,014
  

 
$
5,951
    
$
1,987
    
$
5,802
  
Amortized Cost Basis in Loans by Credit Quality Indicator and Origination Year
The following table reflects the amortized cost basis in loans by credit quality indicator and origination year at June 30, 2023, excluding loans held for sale. Loans acquired are shown in the table by origination year, not merger date. The Company had an immaterial amount of revolving loans converted to term loans at June 30, 2023.

 
                    
Term Loans
                    
 
              
Amortized Cost Basis by Origination Year
              

                                               
(Dollars in thousands)                                                

 
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
Revolving Loans
    
Total
  

                                               
Commercial real estate:
                                               
Pass
  
$
176,070
    
$
297,336
    
$
200,707
    
$
64,464
    
$
51,726
    
$
189,162
    
$
3,176
    
$
982,641
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
19
      
21,334
      
1,680
      
827
      
408
      
—
      
24,268
  
Doubtful     —       —       —       —       —       —       —       —  
Total commercial real estate loans
  
$
176,070
    
$
297,355
    
$
222,041
    
$
66,144
    
$
52,553
    
$
189,570
    
$
3,176
    
$
1,006,909
  
Current period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  
 
                                                                
Commercial - specialized:
                                                                
Pass
  
$
80,261
    
$
66,731
    
$
60,490
    
$
21,415
    
$
13,081
    
$
27,015
    
$
85,499
    
$
354,492
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
76
      
183
      
427
      
19
      
55
      
—
      
760
  
Doubtful     —       —       —       —       —       —       —       —  
Total commercial - specialized loans
  
$
80,261
    
$
66,807
    
$
60,673
    
$
21,842
    
$
13,100
    
$
27,070
    
$
85,499
    
$
355,252
  
Current period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  
 
                                                                
Commercial - general:
                                                                
Pass
  
$
62,492
    
$
150,617
    
$
104,547
    
$
39,728
    
$
37,506
    
$
74,893
    
$
51,304
    
$
521,087
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
279
      
11,511
      
4,656
      
507
      
6,738
      
5,963
      
355
      
30,009
  
Doubtful     —       —       —       —       —       —       —       —  
Total commercial - general loans
  
$
62,771
    
$
162,128
    
$
109,203
    
$
40,235
    
$
44,244
    
$
80,856
    
$
51,659
    
$
551,096
  
Current period gross charge-offs
  
$
—
    
$
—
    
$
25
    
$
10
    
$
18
    
$
316
    
$
—
    
$
369
  
Consumer: 1-4 family residential:
                                                                
 
                                                                
Pass
  
$
66,427
    
$
165,339
    
$
114,591
    
$
55,850
    
$
33,736
    
$
65,403
    
$
9,613
    
$
510,959
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
313
      
941
      
1,732
      
4,321
      
4,193
      
13
      
11,513
  
Doubtful     —       —       —       —       —       —       —       —  
Total consumer: 1-4 family residential loans
  
$
66,427
    
$
165,652
    
$
115,532
    
$
57,582
    
$
38,057
    
$
69,596
    
$
9,626
    
$
522,472
  
Current period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  
 
                                                                
Consumer: auto loans:
                                                                
Pass
  
$
62,837
     $
153,144
     $
63,162
     $
22,673
     $
11,154
     $
4,659
     $
—
     $
317,629
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
43
      
265
      
48
      
83
      
58
      
—
      
497
  
Doubtful     —       —       —       —       —       —       —       —  
Total consumer: auto loans
  
$
62,837
    
$
153,187
    
$
63,427
    
$
22,721
    
$
11,237
    
$
4,717
    
$
—
    
$
318,126
  
Current period gross charge-offs
  
$
21
    
$
181
    
$
137
    
$
—
    
$
28
    
$
44
    
$
—
    
$
411
  
 
                                                                
Consumer: other consumer:
                                                                
Pass
  
$
14,830
    
$
34,453
    
$
13,564
    
$
4,510
    
$
3,316
    
$
7,253
    
$
1,653
    
$
79,579
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
22
      
32
      
33
      
36
      
93
      
—
      
216
  
Doubtful     —       —       —       —       —       —       —       —  
Total consumer: other consumer loans
  
$
14,830
    
$
34,475
    
$
13,596
    
$
4,543
    
$
3,352
    
$
7,346
    
$
1,653
    
$
79,795
  
Current period gross charge-offs
  
$
183
    
$
159
    
$
23
    
$
7
    
$
37
    
$
33
    
$
—
    
$
442
  
                                                 
Construction:
                                                
Pass
  
$
24,337
    
$
89,551
    
$
21,144
    
$
289
    
$
—
    
$
—
    
$
9,869
    
$
145,190
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
223
      
—
      
—
      
—
      
—
      
—
      
223
  
Doubtful     —       —       —       —       —       —       —       —  
Total construction loans
  
$
24,337
    
$
89,774
    
$
21,144
    
$
289
    
$
—
    
$
—
    
$
9,869
    
$
145,413
  
Current period gross charge-offs
   $
—     $
—     $
272     $
—     $
—     $
—     $
—     $
272  

The following table summarizes loans by credit quality indicator at December 31, 2022 (dollars in thousands):

 
Pass
    
Special
Mention
    
Substandard
    
Doubtful
    
Total
  
Commercial real estate
  
$
893,312
    
$
—
    
$
26,046
    
$
—
    
$
919,358
  
Commercial - specialized
    
326,987
      
—
      
526
      
—
      
327,513
  
Commercial - general
    
451,639
      
—
      
33,144
      
—
      
484,783
  
Consumer:
                                        
1-4 family residential
    
450,034
      
—
      
10,090
      
—
      
460,124
  
Auto loans
    
321,158
      
—
      
318
      
—
      
321,476
  
Other consumer
    
81,109
      
—
      
199
      
—
      
81,308
  
Construction
    
151,995
      
—
      
1,524
      
—
      
153,519
  

 
$
2,676,234
    
$
—
    
$
71,847
    
$
—
    
$
2,748,081
  
Amortized Cost Basis of Loans Modified to Borrowers Experiencing Financial Difficulty and Financial Effects of Loan Modifications
The following tables present the amortized cost basis of loans at June 30, 2023 that were both experiencing financial difficulty and modified during the periods indicated by class and by type of modification.  The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost bases of each class of financing receivable is also presented below (dollars in thousands):

 
  
Payment
Delay
    
Term
Extension
    
Term
Extension
and
Payment
Delay
    
Term
Extension and
Interest Rate
Reduction
    
Payment
Delay and
Interest Rate
Reduction
    
Payment
Delay, Term
Extension,
and Interest
Rate
Reduction
   
Total Class
of Financing
Receivable
  
                                           
Three Months Ended June 30, 2023
                                            
Commercial real estate
  
$
—
    
$
—
    
$
96
    
$
—
     $
 —     $
 —     $
0.01
%
Commercial - specialized
    
118
      
690
      
82
      
—
       —       —      
0.25
%
Commercial - general
    
—
      
2,744
      
453
      
70
       —       39      
0.60
%
Consumer:
                                                        
1-4 family
    
7
      
192
      
—
      
—
       —       13      
0.04
%
Auto loans
    
—
      
—
      
—
      
—
       —       —      
0.00
%
Other consumer
    
—
      
—
      
—
      
—
       13       —      
0.02
%
Construction
    
—
      
1,654
      
—
      
—
       —       —      
1.14
%
 
  
$
125
    
$
5,280
    
$
631
    
$
70
     $
 13     $
 52     $
0.20
%

 
  
Payment
Delay
    
Term
Extension
    
Term
Extension
and
Payment
Delay
    
Term
Extension and
Interest Rate
Reduction
    
Payment
Delay and
Interest Rate
Reduction
    
Payment
Delay, Term
Extension,
and Interest
Rate
Reduction
   
Total Class
of Financing
Receivable
  
                                           
Six Months Ended June 30, 2023
                                          
Commercial real estate
  
$
—
    
$
—
    
$
96
    
$
—
     $ —     $ —    
$
0.01
%
Commercial - specialized
    
118
      
690
      
82
      
—
       —       —      
0.25
%
Commercial - general
    
—
      
4,726
      
453
      
113
       —       39      
0.97
%
Consumer:
                                                        
1-4 family
    
7
      
391
      
—
      
—
       —       13      
0.08
%
Auto loans
    
—
      
39
      
—
      
—
       —       —      
0.01
%
Other consumer
    
—
      
—
      
—
      
—
       13       —      
0.02
%
Construction
    
—
      
1,654
      
—
      
—
       —       —      
1.14
%
 
  
$
125
    
$
7,500
    
$
631
    
$
113
     $ 13     $ 52    
$
0.28
%

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.  The following presents the performance of such loans that have been modified in the six months ended June 30, 2023 (dollars in thousands):

 
  
30-89 Days
Past Due
    
90 Days or
More Past Due
and Still
Accruing
    
Nonaccrual
  
June 30, 2023
                  
Commercial real estate
  
$
—
    
$
—
    
$
—
  
Commercial - specialized
    
—
      
—
      
19
  
Commercial - general
    
27
      
—
      
1,682
  
Consumer:
                        
1-4 Family residential
    
199
      
—
      
7
  
Auto loans
    
—
      
—
      
—
  
Other consumer
    
—
      
—
      
—
  
Construction
    
—
      
—
      
—
  
 
  
$
226
    
$
—
    
$
1,708
  

The following tables present the financial effects of the loan modifications presented above to borrowers experiencing financial difficulty during the periods indicated below (dollars in thousands):

 
  
Principal
Forgiveness
    
Weighted-
Average
Interest Rate
Reduction
    
Weighted-
Average
Term
Extension
(Months)
  
Three Months Ended June 30, 2023
                  
Commercial real estate
  
$
—
      
0.00
%
    
72
  
Commercial - specialized
    
—
      
0.00
%
    
13
  
Commercial - general
    
—
      
2.50
%
    
1320
  
Consumer:
                        
1-4 Family residential
    
—
      
0.25
%
    
16
  
Auto loans
    
—
      
0.00
%
    
—
  
Other consumer
    
—
      
4.75
%
    
—
  
Construction
    
—
      
0.00
%
    
11
  
 
  
$
—
      
2.50
%
    
729
  

 
  
Principal
Forgiveness
    
Weighted-
Average
Interest Rate
Reduction
    
Weighted-
Average
Term
Extension
(Months)
  
Six Months Ended June 30, 2023
                  
Commercial real estate
  
$
—
      
0.00
%
    
72
  
Commercial - specialized
    
—
      
0.00
%
    
13
  
Commercial - general
    
—
      
1.81
%
    
835
  
Consumer:
                        
1-4 Family residential
    
—
      
0.25
%
    
13
  
Auto loans
    
—
      
0.00
%
    
15
  
Other consumer
    
—
      
4.75
%
    
—
  
Construction
    
—
      
0.00
%
    
11
  
 
  
$
—
      
1.91
%
    
542