XML 38 R28.htm IDEA: XBRL DOCUMENT v3.23.3
LOANS AND THE ALLOWANCE FOR CREDIT LOSSES (Tables)
 9 Months Ended
Sep. 30, 2023
Receivables [Abstract]  
Summary of the Company's loans
The following presents a summary of the Company’s loans at amortized cost as of the dates noted (dollars in thousands):
September 30,
2023		December 31,
2022
Cash, Securities, and Other$148,618 $165,559 
Consumer and Other23,464 26,070 
Construction and Development347,053 285,627 
1-4 Family Residential915,011 899,722 
Non-Owner Occupied CRE523,910 493,134 
Owner Occupied CRE206,958 214,189 
Commercial and Industrial349,981 361,791 
Total2,514,995 2,446,092 
Allowance for credit losses(23,175)(17,183)
Total, net$2,491,820 $2,428,909 
Loans accounted for under the fair value option(1)
15,464 23,321 
Loans, net$2,507,284 $2,452,230 
______________________________________
(1)Includes $16.1 million and $23.4 million of unpaid principal balance of loans held for investment measured at fair value as of September 30, 2023 and December 31, 2022, respectively. Includes fair value adjustments on loans held for investment accounted for under the fair value option. See Note 13 – Fair Value.
Summary of aging analysis of the recorded investments in loans past due
The following presents, by class, an aging analysis of the amortized cost basis in loans past due as of the date noted (dollars in thousands):
September 30, 202330-59
Days
Past Due		60-89
Days
Past Due		90 or
More Days
Past Due		Total
Loans
Past Due		CurrentTotal
Amortized
Cost
Loans Accounted for Under the Fair Value Option(1)
Total Loans
Cash, Securities, and Other$3,732 $— $1,704 $5,436 $143,182 $148,618 $— $148,618 
Consumer and Other8 5 7,503 7,516 15,948 23,464 15,464 38,928 
Construction and Development2,752 — — 2,752 344,301 347,053 — 347,053 
1-4 Family Residential3,651 2,438 625 6,714 908,297 915,011 — 915,011 
Non-Owner Occupied CRE— — — — 523,910 523,910 — 523,910 
Owner Occupied CRE— — 3,980 3,980 202,978 206,958 — 206,958 
Commercial and Industrial4,556 — 37,885 42,441 307,540 349,981 — 349,981 
Total$14,699 $2,443 $51,697 $68,839 $2,446,156 $2,514,995 $15,464 $2,530,459 
December 31, 202230-59
Days
Past Due		60-89
Days
Past Due		90 or
More Days
Past Due		Total
Loans
Past Due		CurrentTotal Amortized Cost
Loans Accounted for Under the Fair Value Option(1)
Total Loans
Cash, Securities, and Other$1,735 $539 $4 $2,278 $163,281 $165,559 $— $165,559 
Consumer and Other657 5 5 667 25,403 26,070 23,321 49,391 
Construction and Development— — 201 201 285,426 285,627 — 285,627 
1-4 Family Residential1,752 — 5 1,757 897,965 899,722 — 899,722 
Non-Owner Occupied CRE1,071 — — 1,071 492,063 493,134 — 493,134 
Owner Occupied CRE1,165 — — 1,165 213,024 214,189 — 214,189 
Commercial and Industrial4,858 10,648 1,319 16,825 344,966 361,791 — 361,791 
Total$11,238 $11,192 $1,534 $23,964 $2,422,128 $2,446,092 $23,321 $2,469,413 
(1)Refer to Note 13 - Fair Value for additional information on the measurement of loans accounted for under the fair value option.
Summary modified loans
The following table presents the amortized cost basis as of September 30, 2023 of the loans modified to borrowers experiencing financial difficulty disaggregated by class of financing receivable and type of concession granted during the three months and nine months ended September 30, 2023. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below.
Principal forgivenessInterest rate reductionTerm extensionCombination: term extension and principal forgivenessCombination: term extension and interest rate reductionTotal class of financing receivable
Commercial and Industrial$— $— $— $185 $— 0.1 %
Total$— $— $— $185 $— 

The following table presents the financial effect by type of modification made to borrowers experiencing financial difficulty for the period ended September 30, 2023:
Principal forgivenessInterest rate reductionTerm extension
Commercial and Industrial
Reduced the amortized cost basis of the loan by $185 thousand
—
Added a weighted-average 2.8 years to the life of the loan, which reduced monthly payment amounts for the borrower
For all loans that have been modified during the period, the borrowers continue to pay as agreed.
Schedule of recorded investment in non accrual loans by class The following presents the amortized cost basis of loans on non-accrual status and loans past due over 89 days still accruing by class as of the date noted (dollars in thousands).
As of September 30, 2023
Non-accrual loans with
no ACL		Total non-accrual loansLoans past due over 89 days still accruing
Cash, Securities, and Other$1,704 $1,704 $— 
Consumer and Other7,503 7,503 — 
Construction and Development— — — 
1-4 Family Residential3,063 3,063 — 
Owner Occupied CRE3,980 3,980 — 
Commercial and Industrial(1)
30,795 39,370 — 
Total$47,045 $55,620 $— 
(1)The Company recorded an allowance of $4.0 million on two individually analyzed loans totaling $8.6 million as of September 30, 2023.
The following presents the recorded investment in non-accrual loans by class as of the date noted (dollars in thousands):
As of December 31, 2022
Non-accrual loans with
no ALLL		Total non-accrual loansLoans past due over 89 days still accruing
Cash, Securities, and Other$4 $4 $— 
Consumer and Other5 5 — 
Construction and Development201 201 — 
1-4 Family Residential— — — 
Owner Occupied CRE1,165 1,165 — 
Commercial and Industrial10,762 10,762 25 
Total(1)
$12,137 $12,137 $25 
(1)The Company did not record a specific reserve on any individually analyzed loans as of December 31, 2022.
The following presents the amortized cost basis of collateral-dependent loans, which are individually evaluated to determine expected credit losses, by class of loans as of the date noted (dollars in thousands):
As of September 30, 2023
Collateral Dependent Loans
Secured by Real EstateSecured by Cash and
Securities		Secured by OtherTotal
Cash, Securities, and Other$— $1,704 $— $1,704 
Consumer and Other— — — — 
Construction and Development— — — — 
1-4 Family Residential3,063 — — 3,063 
Non-Owner Occupied CRE— — — — 
Owner Occupied CRE3,980 — — 3,980 
Commercial and Industrial— — 39,370 39,370 
Total$7,043 $1,704 $39,370 $48,117 
Schedule of activity in the Company's allowance for loan losses by portfolio class The following table presents the activity in the allowance for credit losses by portfolio segment during the periods presented (dollars in thousands):
Cash,
Securities
and Other		Consumer
and
Other		Construction
and
Development		1-4
Family
Residential		Non-Owner
Occupied
CRE		Owner
Occupied
CRE		Commercial
and
Industrial		Total
Changes in allowance for credit losses for the three months ended September 30, 2023
Beginning balance$1,311 $137 $7,496 $3,579 $2,495 $1,182 $5,844 $22,044 
Provision for credit losses(185)(15)405 38 (240)(172)1,490 1,321 
Charge-offs— (12)— — — — (186)(198)
Recoveries— 4 — 3 — — 1 8 
Ending balance$1,126 $114 $7,901 $3,620 $2,255 $1,010 $7,149 $23,175 
Changes in allowance for credit losses for the nine months ended September 30, 2023
Beginning balance, prior to the adoption of ASU 2016-13$1,198 $191 $2,025 $6,309 $3,490 $1,510 $2,460 $17,183 
Impact of adopting ASU 2016-13193 106 4,681 (2,808)(689)(104)2,091 3,470 
Provision for credit losses(265)(160)1,195 116 (546)(396)2,781 2,725 
Charge-offs— (42)— — — — (186)(228)
Recoveries— 19 — 3 — — 3 25 
Ending balance$1,126 $114 $7,901 $3,620 $2,255 $1,010 $7,149 $23,175 
Allowance for credit losses as of September 30, 2023 allocated to loans evaluated:         
Individually$— $— $— $— $— $— $4,000 $4,000 
Collectively1,126 114 7,901 3,620 2,255 1,010 3,149 19,175 
Ending balance$1,126 $114 $7,901 $3,620 $2,255 $1,010 $7,149 $23,175 
Loans as of September 30, 2023:        
Individually evaluated$1,704 $7,500 $— $3,063 $— $3,980 $39,370 $55,617 
Collectively evaluated146,914 15,964 347,053 911,948 523,910 202,978 310,611 2,459,378 
Loans held for investment measured at fair value— 15,464 — — — — — 15,464 
Ending balance$148,618 $38,928 $347,053 $915,011 $523,910 $206,958 $349,981 $2,530,459 
Cash,
Securities
and Other		Consumer
and
Other		Construction
and
Development		1-4
Family
Residential		Non-Owner
Occupied
CRE		Owner
Occupied
CRE		Commercial
and
Industrial		Total
Changes in allowance for loan losses for the three months ended September 30, 2022
Beginning balance$1,194 $220 $1,074 $4,845 $3,235 $1,477 $2,312 $14,357 
Provision for loan losses(97)9 496 824 402 31 91 1,756 
Charge-offs— (50)— — — — — (50)
Recoveries— 18 — — — — — 18 
Ending balance$1,097 $197 $1,570 $5,669 $3,637 $1,508 $2,403 $16,081 
Changes in allowance for loan losses for the nine months ended September 30, 2022
Beginning balance$1,598 $266 $1,092 $3,553 $2,952 $1,292 $2,979 $13,732 
Provision for loan losses(501)67 478 2,116 685 216 (576)2,485 
Charge-offs— (242)— — — — — (242)
Recoveries— 106 — — — — — 106 
Ending balance$1,097 $197 $1,570 $5,669 $3,637 $1,508 $2,403 $16,081 
Allowance for loan losses as of December 31, 2022 allocated to loans evaluated:        
Individually$— $— $— $— $— $— $— $— 
Collectively1,198 191 2,025 6,309 3,490 1,510 2,460 17,183 
Ending balance$1,198 $191 $2,025 $6,309 $3,490 $1,510 $2,460 $17,183 
Loans as of December 31, 2022:        
Individually evaluated$4 $5 $201 $— $— $1,165 $10,762 $12,137 
Collectively evaluated165,555 26,065 285,426 899,722 493,134 213,024 351,029 2,433,955 
Loans held for investment measured at fair value$— $23,321 $— $— $— $— $— $23,321 
Ending balance$165,559 $49,391 $285,627 $899,722 $493,134 $214,189 $361,791 $2,469,413 
Summary of recorded investment in the Company's loans by class and by credit quality indicator
The following table presents the amortized cost basis of loans by credit quality indicator, by class of financing receivable, and year of origination for term loans as of September 30, 2023. For revolving lines of credit that converted to term loans, if the conversion involved a credit decision, such loans are included in the origination year in which the credit decision was made. If revolving lines of credit converted to term loans without a credit decision, such lines of credit are included in the “Revolving lines of credit converted to term” column in the following table.

Term Loans Amortized Cost by Origination Year
September 30, 202320232022202120202019PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to TermTotal
Cash, Securities, and Other
Pass$7,626 $11,995 $21,546 $5,982 $6,556 $13,243 $79,966 $— $146,914 
Special mention— — — — — — — — — 
Substandard— — — — — — 1,704 — 1,704 
Not rated— — — — — — — — — 
Total Cash, Securities, and Other$7,626 $11,995 $21,546 $5,982 $6,556 $13,243 $81,670 $— $148,618 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— $— 
Consumer and Other
Pass$650 $1,612 $662 $716 $922 $26 $11,376 $— $15,964 
Special mention— — — — — — — — — 
Substandard— — — — — — 7,500 — 7,500 
Not rated(1)
— 11,548 2,965 835 116 — — — 15,464 
Total Consumer and Other$650 $13,160 $3,627 $1,551 $1,038 $26 $18,876 $— $38,928 
Current year-to-date gross write-offs$— $— $— $6 $34 $2 $— $— $42 
Construction and Development
Pass$24,410 $253,895 $45,112 $20,590 $— $— $3,046 $— $347,053 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Not rated— — — — — — — — — 
Total Construction and Development$24,410 $253,895 $45,112 $20,590 $— $— $3,046 $— $347,053 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— $— 
1-4 Family Residential
Pass$76,406 $379,601 $148,757 $109,485 $38,171 $33,324 $126,204 $— $911,948 
Special mention— — — — — — — — — 
Substandard625 2,438 — — — — — — 3,063 
Not rated— — — — — — — — — 
Total 1-4 Family Residential$77,031 $382,039 $148,757 $109,485 $38,171 $33,324 $126,204 $— $915,011 
Term Loans Amortized Cost by Origination Year
September 30, 202320232022202120202019PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to TermTotal
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— $— 
Non-Owner Occupied CRE
Pass$37,094 $179,154 $130,893 $76,321 $24,567 $54,024 $16,825 $— $518,878 
Special mention— — — 5,032 — — — — 5,032 
Substandard— — — — — — — — — 
Not rated— — — — — — — — — 
Total Non-Owner Occupied CRE$37,094 $179,154 $130,893 $81,353 $24,567 $54,024 $16,825 $— $523,910 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— $— 
Owner Occupied CRE
Pass$3,259 $44,366 $54,788 $38,315 $5,631 $51,826 $4,793 $— $202,978 
Special mention— — — — — — — — — 
Substandard— — 3,980 — — — — — 3,980 
Not rated— — — — — — — — — 
Total Owner Occupied CRE$3,259 $44,366 $58,768 $38,315 $5,631 $51,826 $4,793 $— $206,958 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— $— 
Commercial and Industrial
Pass$39,928 $70,374 $15,972 $14,190 $6,703 $14,542 $144,812 $— $306,521 
Special mention— — — 1,656 — — 648 — 2,304 
Substandard185 7,590 29,358 1,300 — 1,040 1,683 — 41,156 
Not rated— — — — — — — — — 
Total Commercial and Industrial$40,113 $77,964 $45,330 $17,146 $6,703 $15,582 $147,143 $— $349,981 
Current year-to-date gross write-offs$— $186 $— $— $— $— $— $— $186 
Total$190,183 $962,573 $454,033 $274,422 $82,666 $168,025 $398,557 $— $2,530,459 
(1)Includes loans held for investment measured at fair value as of September 30, 2023. Includes fair value adjustments on loans held for investment accounted for under the fair value option.
The following presents, by class and by credit quality indicator, the recorded investment in the Company’s loans as of the date noted (dollars in thousands):
December 31, 2022PassSpecial
Mention		SubstandardNot RatedTotal
Cash, Securities, and Other$165,555 $— $4 $— $165,559 
Consumer and Other(1)
26,070 — — 23,321 49,391 
Construction and Development285,426 — 201 — 285,627 
1-4 Family Residential899,722 — — — 899,722 
Non-Owner Occupied CRE493,134 — — — 493,134 
Owner Occupied CRE213,024 — 1,165 — 214,189 
Commercial and Industrial348,844 2,185 10,762 — 361,791 
Total$2,431,775 $2,185 $12,132 $23,321 $2,469,413 
(1)Includes loans held for investment measured at fair value as of December 31, 2022. Includes fair value adjustments on loans held for investment accounted for under the fair value option.