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LOANS HELD FOR INVESTMENT (Tables)
 12 Months Ended
Dec. 31, 2023
LOANS HELD FOR INVESTMENT [Abstract]  
Summary of Loans Held for Investment by Category
Loans held for investment are summarized by category at year-end as follows (dollars in thousands):

   
December 31,
2023
    
December 31,
2022
  
Commercial real estate
  
$
1,081,056
    
$
919,358
  
Commercial - specialized
    
372,376
      
327,513
  
Commercial - general
    
517,361
      
484,783
  
Consumer:
                
1-4 family residential
    
534,731
      
460,124
  
Auto loans
    
305,271
      
321,476
  
Other consumer
    
74,168
      
81,308
  
Construction
    
129,190
      
153,519
  
     
3,014,153
      
2,748,081
  
Allowance for credit losses on loans
    
(42,356
)
    
(39,288
)
Loans, net
  
$
2,971,797
    
$
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 the years ended December 31, 2023, 2022, and 2021 (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
    
Impact of
CECL
Adoption
    
Provision for
Credit
Losses (1)
    
Charge-offs
    
Recoveries
    
Ending
Balance
  
For the year ended December 31, 2023
                                    
Commercial real estate
  
$
13,029
     $ 827    
$
1,952
    
$
—
    
$
—
     $ 15,808  
Commercial - specialized
    
3,425
       33      
398
      
(11
)
    
175
      
4,020
  
Commercial - general
    
9,215
       (2,574 )    
42
      
(469
)
    
177
      
6,391
  
Consumer:
                                                
1-4 family residential
    
6,194
       1,700      
1,278
      
(1
)
    
6
      
9,177
  
Auto loans
    
3,926
       (332 )    
698
      
(888
)
    
197
      
3,601
  
Other consumer
    
1,376
       (235 )    
688
      
(1,140
)
    
279
      
968
  
Construction
    
2,123
       683      
(96
)
    
(319
)
    
—
      
2,391
  
    $ 39,288     $ 102     $ 4,960     $ (2,828 )   $ 834     $ 42,356  

(1) The $4.6 million provision for credit loss on the consolidated statement of comprehensive income (loss) includes a $5.0 million provision for credit losses on loans and a $(350) thousand provision for off-balance sheet credit exposures for the year ended December 31, 2023.

   
Beginning
Balance
    
Provision for
Credit Losses
    
Charge-offs
     Recoveries
   
Ending
Balance
  
For the year ended December 31, 2022
                              
Commercial real estate
  
$
17,245
    
$
(4,634
)
  
$
—
    
$
418
    
$
13,029
  
Commercial - specialized
    
4,363
      
(1,745
)
    
(199
)
    
1,006
      
3,425
  
Commercial - general
    
8,466
      
627
      
(328
)
    
450
      
9,215
  
Consumer:
                                        
1-4 family residential
    
5,268
      
1,026
      
(140
)
    
40
      
6,194
  
Auto loans
    
3,653
      
637
      
(508
)
    
144
      
3,926
  
Other consumer
    
1,357
      
932
      
(1,167
)
    
254
      
1,376
  
Construction
    
1,746
      
538
      
(166
)
    
5
      
2,123
  

 
$
42,098
    
$
(2,619
)
  
$
(2,508
)
  
$
2,317
    
$
39,288
  

    
Beginning
Balance
   
Provision for
Credit Losses
     Charge-offs
    Recoveries
    Ending
Balance
 
For the year ended December 31, 2021
                              
Commercial real estate
  
$
18,962
    
$
(1,826
)
  
$
—
    
$
109
    
$
17,245
  
Commercial - specialized
    
5,760
      
(1,386
)
    
(172
)
    
161
      
4,363
  
Commercial - general
    
9,227
      
(302
)
    
(677
)
    
218
      
8,466
  
Consumer:
                                        
1-4 family residential
    
4,646
      
666
      
(52
)
    
8
      
5,268
  
Auto loans
    
4,226
      
(90
)
    
(598
)
    
115
      
3,653
  
Other consumer
    
1,671
      
339
      
(903
)
    
250
      
1,357
  
Construction
    
1,061
      
681
      
—
      
4
      
1,746
  

 
$
45,553
    
$
(1,918
)
  
$
(2,402
)
  
$
865
    
$
42,098
  

During the year ended December 31, 2023, the provision for credit losses on loans of $5.0 million was driven primarily by organic loan growth experienced during 2023 and net charge-offs of $2.0 million during the year.

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).

 
   Equipment     Real Estate    
Accounts
Receivable
    
Total Loans
Individually
Evaluated
    
Total ACL
for
Individually
Evaluated
Loans
  
December 31, 2023
                              
Commercial real estate
   $ —     $ —     $ —    
$
—
    
$
—
  
Commercial - specialized
     —       —       —      
—
      
—
  
Commercial - general
     353       691       —      
1,044
      
142
  
Consumer:
                                        
1-4 family residential
     —       362       —      
362
      
—
  
Auto loans
     —       —       —      
—
      
—
  
Other consumer
     —       —       —      
—
      
—
  
Construction
     —       218       —      
218
      
—
  
 
   $
 353     $
 1,271     $ —    
$
1,624
    
$
142
  

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 year-end (dollars in thousands):


  
30-89 Days
Past Due
    
90 Days or
More Past
Due
    
Total Nonaccrual
    
Nonaccrual
with no
ACL
  
December 31, 2023                        
Commercial real estate
  
$
499
    
$
86
    
$
—
     $ —  
Commercial - specialized
    
521
      
—
      
213
       —  
Commercial - general
    
1,316
      
296
      
953
       —  
Consumer:
                                
1-4 Family residential
    
793
      
1,390
      
1,828
       362  
Auto loans
    
1,208
      
60
      
—
       —  
Other consumer
    
1,134
      
103
      
30
       —  
Construction
    
759
      
—
      
218
       218  

 
$
6,230
    
$
1,935
    
$
3,242
     $ 580  

   
30-89 Days
Past Due
    
90 Days or
More Past Due
    
Total
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 and Gross Charge-offs
The following table reflects the amortized cost basis in loans by credit quality indicator and origination year at December 31, 2023, and gross charge-offs for the year ended December 31, 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 December 31, 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
  
$
254,766
    
$
324,601
    
$
189,211
    
$
50,660
    
$
47,988
    
$
174,859
    
$
3,842
    
$
1,045,927
  
Special mention
    
—
      
—
      
—
      
11,677
      
—
      
—
      
—
      
11,677
  
Substandard
    
—
      
82
      
21,152
      
1,699
      
149
      
370
      
—
      
23,452
  
Total commercial real estate loans
  
$
254,766
    
$
324,683
    
$
210,363
    
$
64,036
    
$
48,137
    
$
175,229
    
$
3,842
    
$
1,081,056
  
Current period gross charge-offs
   $ —     $ —     $ —    
$
—
     $ —     $ —     $ —     $ —  
 
                                                                
Commercial - specialized:
                                                                
Pass
  
$
117,912
    
$
56,152
    
$
57,839
    
$
19,883
    
$
10,376
    
$
22,758
    
$
83,368
    
$
368,288
  
Special mention
    
—
      
2,938
      
—
      
—
      
—
      
—
      
300
      
3,238
  
Substandard
    
—
      
105
      
196
      
393
      
19
      
137
      
—
      
850
  
Total commercial - specialized loans
  
$
117,912
    
$
59,195
    
$
58,035
    
$
20,276
    
$
10,395
    
$
22,895
    
$
83,668
    
$
372,376
  
Current period gross charge-offs
  
$
—
    
$
—
    
$
—
     $ 11     $ —     $ —     $ —     $ 11  
 
                                                                
Commercial - general:
                                                                
Pass
  
$
88,911
    
$
128,627
    
$
90,957
    
$
35,794
    
$
45,660
    
$
68,990
    
$
44,131
    
$
503,070
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
1,565
      
250
      
1,815
  
Substandard
  
201
    
2,930
    
4,676
    
227
    
2,749
    
1,442
    
251
    
12,476
  
Total commercial - general loans
  
$
89,112
    
$
131,557
    
$
95,633
    
$
36,021
    
$
48,409
    
$
71,997
    
$
44,632
    
$
517,361
  
Current period gross charge-offs
   $ —     $ 47     $ 50     $ 33     $ 18    
$
321
     $ —     $ 469  
                                                                 
Consumer: 1-4 family residential:
                                                                
 
                                                                
Pass
  
$
113,897
    
$
156,549
    
$
106,619
    
$
51,940
    
$
31,345
    
$
56,666
    
$
3,770
    
$
520,786
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
376
      
382
      
4,238
      
708
      
3,758
      
4,483
      
—
      
13,945
  
Total consumer: 1-4 family residential loans
  
$
114,273
    
$
156,931
    
$
110,857
    
$
52,648
    
$
35,103
    
$
61,149
    
$
3,770
    
$
534,731
  
Current period gross charge-offs
   $ —     $ —     $ 1     $ —     $ —     $ —     $ —     $ 1  
 
                                                                
Consumer: auto loans:
                                                                
Pass
  
$
106,149
    

124,588
    

48,686
    

16,524
    

6,812
    

1,935
    

—
    

304,694
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
     16
      189
      199
      60
       81       32
      —
      577
 
Total consumer: auto loans
  
$
106,165
    
$
124,777
    
$
48,885
    
$
16,584
    
$
6,893
    
$
1,967
    
$
—
    
$
305,271
  
Current period gross charge-offs
   $ 113     $ 377     $ 254     $ 14     $ 49     $ 81     $ —     $ 888  
 
                                                                
Consumer: other consumer:
                                                                
Pass
  
$
23,719
    
$
26,899
    
$
10,198
    
$
3,190
    
$
2,539
    
$
6,107
    
$
1,364
    
$
74,016
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
13
      
44
      
10
      
—
      
84
      
1
      
152
  
Total consumer: other consumer loans
  
$
23,719
    
$
26,912
    
$
10,242
    
$
3,200
    
$
2,539
    
$
6,191
    
$
1,365
    
$
74,168
  
Current period gross charge-offs (1)
   $ 624     $ 244     $ 88     $ 32     $ 72     $ 80     $ —     $ 1,140  
                                                 
Construction:
                                                
Pass
  
$
61,903
    
$
53,930
    
$
5,511
    
$
331
    
$
—
    
$
—
    
$
6,250
    
$
127,925
  
Special mention
    
131
      
—
      
820
      
—
      
—
      
—
      
—
      
951
  
Substandard
    
—
      
314
      
—
      
—
      
—
      
—
      
—
      
314
  
Total construction loans
  
$
62,034
    
$
54,244
    
$
6,331
    
$
331
    
$
—
    
$
—
    
$
6,250
    
$
129,190
  
Current period gross charge-offs
   $ 48     $ —     $ 271     $ —     $ —     $ —     $ —     $ 319  


(1) Includes $574 thousand in charged-off demand deposit overdrafts reported as 2023 originations.


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 table presents the amortized cost basis of loans at December 31, 2023 that were both experiencing financial difficulty and modified during the year ended December 31, 2023, 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 basis 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
  
                                           
December 31, 2023
                                          
Commercial real estate
  
$
—
    
$
2,118
    
$
127
    
$
—
     $ —     $ —      
0.21
%
Commercial - specialized
    
103
      
—
      
81
      
686
       —       —      
0.23
%
Commercial - general
    
266
      
6,995
      
598
      
109
       —       28      
1.55
%
Consumer:
                                                        
1-4 family
    
187
      
390
      
87
      
—
       —       7      
0.13
%
Auto loans
    
34
      
35
      
17
      
—
       42       —      
0.04
%
Other consumer
    
—
      
—
      
—
      
—
       7       —      
0.01
%
Construction
    
—
      
2,315
      
302
      
—
       —       —      
2.03
%
 
  
$
590
    
$
11,853
    
$
1,212
    
$
795
     $ 49     $ 35      
0.48
%

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 year ended December 31, 2023 (dollars in thousands):

 
  
30-89 Days
Past Due
    
90 Days or
More Past Due
and Still
Accruing
    
Nonaccrual
  
December 31, 2023
                  
Commercial real estate
  
$
—
    
$
—
    
$
—
  
Commercial - specialized
    
—
      
—
      
265
  
Commercial - general
    
69
      
33
      
63
  
Consumer:
                        
1-4 Family residential
    
—
      
—
      
—
  
Auto loans
    
69
      
—
      
—
  
Other consumer
    
—
      
—
      
—
  
Construction
    
—
      
—
      
272
  
 
  
$
138
    
$
33
    
$
600
  

The following table presents the financial effects of the loan modifications presented above to borrowers experiencing financial difficulty for the year ended December 31, 2023 (dollars in thousands):

 
  
Principal
Forgiveness
    
Weighted-
Average
Interest Rate
Reduction
    
Weighted-
Average
Term
Extension
(Months)
  
December 31, 2023                  
Commercial real estate
  
$
—
      
—
   
5
  
Commercial - specialized
    
—
      
0.86
%
    
56
  
Commercial - general
    
—
      
1.97
%
    
16
  
Consumer:
                        
1-4 Family residential
    
—
      
1.75
%
    
16
  
Auto loans
    
—
      
0.86
%
    
11
  
Other consumer
    
—
      
4.75
%
    
—
  
Construction
    
—
      
—
   
6
  
 
  
$
—
      
1.07
%
    
15