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LOANS AND THE ALLOWANCE FOR CREDIT LOSSES (Tables)
 12 Months Ended
Dec. 31, 2023
Receivables [Abstract]  
Summary of the Company's loans
The following table presents a summary of the Company’s loans at amortized cost as of the dates noted:
(Dollars in thousands)December 31,
2023		December 31,
2022
Cash, Securities and Other$139,947 $165,559 
Consumer and Other27,028 26,070 
Construction and Development345,516 285,627 
1-4 Family Residential927,965 899,722 
Non-Owner Occupied CRE543,692 493,134 
Owner Occupied CRE195,861 214,189 
Commercial and Industrial337,180 361,791 
Total2,517,189 2,446,092 
Allowance for credit losses(1)
(23,931)(17,183)
Total, net2,493,258 2,428,909 
Loans accounted for under the fair value option(2)
13,726 23,321 
Loans, net$2,506,984 $2,452,230 
_____________________________
(1)Allowance for credit loss amounts for periods prior to the ASC 326 adoption date of January 1, 2023 are reported in accordance with previously applicable GAAP.
(2)Includes $14.1 million and $23.4 million of unpaid principal balance of loans held for investment measured at fair value as of December 31, 2023 and December 31, 2022 respectively. Includes fair value adjustments on loans held for investment accounted for under the fair value option. See Note 16 – Fair Value.
Summary of aging analysis of the recorded investments in loans past due
The following presents, by class, an aging analysis of the amortized cost basis in loans past due as of the date noted (dollars in thousands):
December 31, 202330-59
Days
Past Due		60-89
Days
Past Due		90 or
More Days
Past Due		Total
Loans
Past Due		CurrentTotal Amortized Cost
Loans Accounted for Under the Fair Value Option(1)
Total Loans
Cash, Securities and Other$— $76 $1,704 $1,780 $138,167 $139,947 $— $139,947 
Consumer and Other676 11 7,504 8,191 18,837 27,028 13,726 40,754 
Construction and Development— 1,500 — 1,500 344,016 345,516 — 345,516 
1-4 Family Residential1,093 — 2,722 3,815 924,150 927,965 — 927,965 
Non-Owner Occupied CRE— — — — 543,692 543,692 — 543,692 
Owner Occupied CRE— — 3,980 3,980 191,881 195,861 — 195,861 
Commercial and Industrial19,305 1,085 29,180 49,570 287,610 337,180 — 337,180 
Total$21,074 $2,672 $45,090 $68,836 $2,448,353 $2,517,189 $13,726 $2,530,915 
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 $2,469,413 
(1)Refer to Note 16 – Fair Value for additional information on the measurement of loans accounted for under the fair value option.
Summary modified loans
The following table presents the amortized cost basis as of December 31, 2023 of the loans modified to borrowers experiencing financial difficulty disaggregated by class of financing receivable and type of concession granted during the year ended December 31, 2023. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below.
(Dollars in thousands)Principal forgivenessInterest rate reductionTerm extensionCombination: term extension and principal forgivenessCombination: term extension and interest rate reductionTotal class of financing receivable
Commercial and Industrial$— $— $2,123 $183 $— 0.7 %
Total$— $— $2,123 $183 $— 
The following table presents the financial effect by type of modification made to borrowers experiencing financial difficulty for the period ended December 31, 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
Commercial and Industrial—
—
Six months of interest payments were deferred to the maturity of the loan. Principal payment of $988 thousand was deferred 0.6 years
Commercial and Industrial—
—
Added a weighted-average 0.5 years to the life of the loan
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).
December 31, 2023
(dollars in thousands)Non-accrual loans with no ACL
Total non-accrual loans(1)
Loans past due over 89 days still accruing
Cash, Securities, and Other$1,704 $1,704 $— 
Consumer and Other4 7,504 — 
Construction and Development2,719 2,719 — 
1-4 Family Residential578 3,016 285 
Owner Occupied CRE— 3,980 — 
Commercial and Industrial2,355 31,893 — 
Total$7,360 $50,816 $285 
(1) As of December 31, 2023, the Company had an allowance of $3.8 million on non-performing loans.
The following presents the recorded investment in non-accrual loans by class as of the date noted (dollars in thousands):
December 31,
2022
Cash, Securities and Other$4 
Consumer and Other146 
Construction and Development201 
Owner Occupied CRE1,165 
Commercial and Industrial10,833 
Total$12,349 
The following presents the amortized cost basis of collateral-dependent loans, which are individually evaluated to determine expected credit losses, by class of loans as of the date noted (dollars in thousands):
As of December 31, 2023
Collateral Dependent Loans
(dollars in thousands)Secured by Real EstateSecured by Cash and SecuritiesSecured by OtherTotal
Cash, Securities, and Other$— $1,704 $— $1,704 
Consumer and Other— — 7,500 7,500 
Construction and Development2,719 — — 2,719 
1-4 Family Residential3,016 — — 3,016 
Owner Occupied CRE3,980 — — 3,980 
Commercial and Industrial— — 31,893 31,893 
Total$9,715 $1,704 $39,393 $50,812 
Summary of impaired loans by portfolio and related valuation allowance
The following presents impaired loans by portfolio and related valuation allowance as of the periods presented (in thousands):
December 31, 2022
Total
Recorded
Investment		Unpaid
Contractual
Principal
Balance		Allowance
for
Loan
Losses
Impaired loans with no related valuation allowance:
Cash, Securities, and Other$4 $4 $— 
Construction and Development201 201 — 
1-4 Family Residential— — — 
Owner Occupied CRE1,165 1,165 — 
Commercial and Industrial10,833 10,833 — 
Total$12,203 $12,203 $— 
Total impaired loans:
Cash, Securities, and Other$4 $4 $— 
Consumer and Other— — — 
Construction and Development201 201 — 
Commercial and Industrial10,833 10,833 — 
1-4 Family Residential— — — 
Owner Occupied CRE1,165 1,165 — 
Total$12,203 $12,203 $— 
Schedule of activity in the Company's allowance for loan losses by portfolio class The following table presents the gross loan activity in the allowance for credit losses by portfolio segment during the periods presented (dollars in thousands):
Cash, Securities and OtherConsumer and OtherConstruction and Development1-4 Family ResidentialNon-Owner Occupied CREOwner Occupied CRECommercial and IndustrialTotal
Changes in allowance for credit losses for the year ended December 31, 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 (release) for credit losses(430)(94)1,239 856 (476)(372)11,354 12,077 
Charge-offs— (101)— — — — (8,737)(8,838)
Recoveries— 22 — 13 — — 4 39 
Ending balance$961 $124 $7,945 $4,370 $2,325 $1,034 $7,172 $23,931 
Cash,
Securities
and Other		Consumer and OtherConstruction
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 year ended December 31, 2022(1):
Beginning balance$1,598 $266 $1,092 $3,553 $2,952 $1,292 $2,979 $13,732 
(Recovery of)/provision for loan losses(399)84 933 2,756 538 218 (448)3,682 
Charge-offs(1)(262)— — — — (71)(334)
Recoveries— 103 — — — — — 103 
Ending balance$1,198 $191 $2,025 $6,309 $3,490 $1,510 $2,460 $17,183 
Allowance for loan losses as of December 31, 2022 allocated to loans evaluated for impairment(1):
Individually$— $— $— $— $— $— $— $— 
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, evaluated for impairment(1):
Individually$4 $— $201 $— $— $1,165 $10,833 $12,203 
Collectively165,666 26,539 288,296 898,154 496,776 214,891 350,195 2,440,517 
Measured at fair value— 23,415 — — — — — 23,415 
Ending balance$165,670 $— $49,954 $— $288,497 $— $898,154 $— $496,776 $— $216,056 $— $361,028 $— $2,476,135 
(1)The allowance for credit losses for periods prior to the ASU 2016-13 adoption date of January 1, 2023 are reported in accordance with previously applicable GAAP which presented loan balances gross rather than amortized cost.
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 December 31, 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
December 31, 202320232022202120202019PriorRevolving Loans Amortized Cost BasisTotal
Cash, Securities, and Other
Pass$8,091 $17,878 $17,181 $5,966 $6,337 $13,188 $69,602 $138,243 
Special mention— — — — — — — — 
Substandard— — — — — — 1,704 1,704 
Doubtful— — — — — — — — 
Not rated— — — — — — — — 
Total Cash, Securities, and Other$8,091 $17,878 $17,181 $5,966 $6,337 $13,188 $71,306 $139,947 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— 
Consumer and Other
Pass$614 $2,013 $647 $633 $797 $24 $14,800 $19,528 
Special mention— — — — — — — — 
Substandard— — — — — — 7,500 7,500 
Doubtful— — — — — — — — 
Not rated(1)— 10,469 2,544 614 99 — — 13,726 
Total Consumer and Other$614 $12,482 $3,191 $1,247 $896 $24 $22,300 $40,754 
Current year-to-date gross write-offs$— $— $— $8 $91 $2 $— $101 
Construction and Development
Pass$32,509 $231,103 $42,796 $21,615 $— $— $431 $328,454 
Special mention— 14,343 — — — — — 14,343 
Substandard2,719 — — — — — — 2,719 
Doubtful— — — — — — — — 
Not rated— — — — — — — — 
Total Construction and Development$35,228 $245,446 $42,796 $21,615 $— $— $431 $345,516 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— 
1-4 Family Residential
Pass$97,901 $373,525 $143,694 $108,815 $37,756 $31,452 $131,806 $924,949 
Special mention— — — — — — — — 
Substandard578 2,438 — — — — — 3,016 
Doubtful— — — — — — — — 
Not rated— — — — — — — — 
Total 1-4 Family Residential$98,479 $375,963 $143,694 $108,815 $37,756 $31,452 $131,806 $927,965 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— 
Non-Owner Occupied CRE
Pass$42,799 $197,122 $125,726 $75,026 $24,411 $53,056 $20,553 $538,693 
Special mention— — — 4,999 — — — 4,999 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Not rated— — — — — — — — 
Total Non-Owner Occupied CRE$42,799 $197,122 $125,726 $80,025 $24,411 $53,056 $20,553 $543,692 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— 
Owner Occupied CRE
Pass$3,229 $46,751 $44,805 $37,957 $5,555 $51,259 $2,325 $191,881 
Special mention— — — — — — — — 
Substandard— — 3,980 — — — — 3,980 
Doubtful— — — — — — — — 
Not rated— — — — — — — — 
Total Owner Occupied CRE$3,229 $46,751 $48,785 $37,957 $5,555 $51,259 $2,325 $195,861 
Current year-to-date gross write-offs$— $— $— $— $— $— $— $— 
Commercial and Industrial
Pass$38,497 $59,612 $15,430 $13,457 $6,430 $16,068 $152,782 $302,276 
Special mention— — — — — — 649 649 
Substandard1,618 — 29,355 1,674 — 920 688 34,255 
Doubtful— — — — — — — — 
Not rated— — — — — — — — 
Total Commercial and Industrial$40,115 $59,612 $44,785 $15,131 $6,430 $16,988 $154,119 $337,180 
Current year-to-date gross write-offs$— $8,737 $— $— $— $— $— $8,737 
Total pass$223,640 $928,004 $390,279 $263,469 $81,286 $165,047 $392,299 $2,444,024 
Total special mention— 14,343 — 4,999 — — 649 19,991 
Total substandard4,915 2,438 33,335 1,674 — 920 9,892 53,174 
Total doubtful— — — — — — — — 
Total not rated— 10,469 2,544 614 99 — — 13,726 
Total$228,555 $955,254 $426,158 $270,756 $81,385 $165,967 $402,840 $2,530,915 
(1)Includes loans held for investment measured at fair value as of December 31, 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(2)
26,065 — 5 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$2,431,770 $2,185 $12,137 $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.