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Loans and Allowance for Credit Losses on Loans HFI
 3 Months Ended
Mar. 31, 2024
Receivables [Abstract]  
Loans and Allowance for Credit Losses on Loans HFI Loans and allowance for credit losses on loans HFI
Loans outstanding as of March 31, 2024 and December 31, 2023, by class of financing receivable are as follows:
 March 31,December 31,
 2024 2023 
Commercial and industrial$1,621,611 $1,720,733 
Construction1,268,883 1,397,313 
Residential real estate:
1-to-4 family mortgage1,577,824 1,568,552 
Residential line of credit549,306 530,912 
Multi-family mortgage615,081 603,804 
Commercial real estate:
Owner-occupied1,236,007 1,232,071 
Non-owner occupied1,991,526 1,943,525 
Consumer and other428,671 411,873 
Gross loans9,288,909 9,408,783 
Less: Allowance for credit losses on loans HFI(151,667)(150,326)
Net loans$9,137,242 $9,258,457 
As of March 31, 2024 and December 31, 2023, $950,787 and $1,030,016, respectively, of qualifying residential mortgage loans (including loans held for sale) and $1,563,819 and $1,984,007, respectively, of qualifying commercial mortgage loans were pledged to the FHLB system securing advances against the Bank’s line of credit. Additionally, as of March 31, 2024 and December 31, 2023, qualifying commercial and industrial, construction and consumer loans, of $2,982,391 and $3,107,495, respectively, were pledged to the Federal Reserve under the Borrower-in-Custody program.
The amortized cost of loans HFI on the consolidated balance sheets exclude accrued interest receivable as the Company presents accrued interest receivable separately on the balance sheet. As of March 31, 2024 and December 31, 2023, accrued interest receivable on loans HFI amounted to $45,840 and $43,776, respectively.
Credit Quality - Commercial Type Loans
The Company categorizes commercial loan types into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans that share similar risk characteristics collectively. Loans that do not share similar risk characteristics are evaluated individually.
The Company uses the following definitions for risk ratings:
Pass.
Loans rated Pass include those that are adequately collateralized performing loans which management believes do not have conditions that have occurred or may occur that would result in the loan being downgraded into an inferior category. The Pass category also includes commercial loans rated as Watch, which include those that management believes have conditions that have occurred, or may occur, which could result in the loan being downgraded to an inferior category.

Special Mention.
Loans rated Special Mention are those that have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position at some future date. Management does not believe there will be a loss of principal or interest. These loans require intensive servicing and may possess more than normal credit risk.
Classified.
Loans included in the Classified category include loans rated as Substandard and Doubtful. Loans rated as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful loans have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weakness or weaknesses make collection or liquidation in full, based on currently existing facts, conditions, and values, highly questionable and improbable.
Risk ratings are updated on an ongoing basis and are subject to change by continuous loan monitoring processes.
The following tables present the credit quality of the Company's commercial type loan portfolio as of March 31, 2024 and December 31, 2023 and the gross charge-offs for the three months ended March 31, 2024 and the year ended December 31, 2023 by year of origination. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination.

As of and for the three months
    ended March 31, 2024
2024 2023 2022 2021 2020 PriorRevolving Loans Amortized Cost BasisTotal
Commercial and industrial
Pass$16,449 $202,050 $237,139 $72,725 $36,876 $129,057 $864,065 $1,558,361 
Special Mention— 3,675 17,572 2,913 — 247 4,521 28,928 
Classified— 457 4,328 3,017 2,987 6,350 17,183 34,322 
Total16,449 206,182 259,039 78,655 39,863 135,654 885,769 1,621,611 
            Current-period gross
               charge-offs		— — — 14 — 7 22 43 
Construction
Pass39,360 193,203 551,909 124,878 36,531 86,713 187,955 1,220,549 
Special Mention— 711 4,689 2,508 — 657 12,000 20,565 
Classified— — 3,986 2,590 6,877 — 14,316 27,769 
Total39,360 193,914 560,584 129,976 43,408 87,370 214,271 1,268,883 
            Current-period gross
               charge-offs		— — — — — — 92 92 
Residential real estate:
Multi-family mortgage
Pass— 29,861 193,591 244,770 54,744 68,104 22,953 614,023 
Special Mention— — — — — — — — 
Classified— — — — — 1,058 — 1,058 
Total— 29,861 193,591 244,770 54,744 69,162 22,953 615,081 
             Current-period gross
                charge-offs		— — — — — — — — 
Commercial real estate:
Owner occupied
Pass24,636 112,168 253,377 231,354 113,481 428,182 53,516 1,216,714 
Special Mention— — 1,283 1,811 — 2,547 — 5,641 
Classified— — 6,281 16 65 6,228 1,062 13,652 
Total24,636 112,168 260,941 233,181 113,546 436,957 54,578 1,236,007 
            Current-period gross
              charge-offs		— — — — — — — — 
Non-owner occupied
Pass3,755 45,516 533,649 468,553 122,699 750,943 43,090 1,968,205 
Special Mention— — — 3,966 — 83 — 4,049 
Classified— — — 998 — 18,274 — 19,272 
Total3,755 45,516 533,649 473,517 122,699 769,300 43,090 1,991,526 
             Current-period gross
                charge-offs		— — — — — — — — 
Total commercial loan types
Pass84,200 582,798 1,769,665 1,142,280 364,331 1,462,999 1,171,579 6,577,852 
Special Mention— 4,386 23,544 11,198 — 3,534 16,521 59,183 
Classified— 457 14,595 6,621 9,929 31,910 32,561 96,073 
Total$84,200 $587,641 $1,807,804 $1,160,099 $374,260 $1,498,443 $1,220,661 $6,733,108 
            Current-period gross
                charge-offs		$— $— $— $14 $— $7 $114 $135 
As of and for the year ended
  December 31, 2023 		2023 2022 2021 2020 2019 PriorRevolving Loans Amortized Cost BasisTotal
Commercial and industrial
Pass$225,734 $255,921 $151,492 $39,897 $70,302 $73,415 $839,918 $1,656,679 
Special Mention— 17,947 3,083 — 151 108 7,549 28,838 
Classified457 4,253 3,075 3,027 254 6,129 18,021 35,216 
Total226,191 278,121 157,650 42,924 70,707 79,652 865,488 1,720,733 
              Current-period gross
                 charge-offs		14 7 201 22 — 87 131 462 
Construction
Pass179,929 677,387 148,312 46,697 39,140 49,954 208,491 1,349,910 
Special Mention1 4,659 2,943 1,202 — 690 12,000 21,495 
Classified— 2,349 1,484 6,620 — — 15,455 25,908 
Total179,930 684,395 152,739 54,519 39,140 50,644 235,946 1,397,313 
              Current-period gross
                  charge-offs		— — — — — — — — 
Residential real estate:
Multi-family mortgage
Pass29,982 151,495 223,889 92,745 29,933 43,479 31,209 602,732 
Special Mention— — — — — — — — 
Classified— — — — — 1,072 — 1,072 
Total29,982 151,495 223,889 92,745 29,933 44,551 31,209 603,804 
             Current-period gross
                 charge-offs		— — — — — — — — 
Commercial real estate:
Owner occupied
Pass118,030 261,196 231,241 115,397 151,146 281,253 53,970 1,212,233 
Special Mention— 1,297 1,827 — 154 2,617 — 5,895 
Classified— 6,305 16 — 760 5,789 1,073 13,943 
Total118,030 268,798 233,084 115,397 152,060 289,659 55,043 1,232,071 
              Current-period gross
                  charge-offs		— — 144 — — — — 144 
Non-owner occupied
Pass47,026 474,560 478,878 117,429 178,448 580,16843,577 1,920,086 
Special Mention— — 3,975 — — 10,435— 14,410 
Classified— — 1,001 — 381 7,647— 9,029 
Total47,026 474,560 483,854 117,429 178,829 598,250 43,577 1,943,525 
               Current-period gross
                   charge-offs		— — — — — — — — 
Total commercial loan types
Pass600,701 1,820,559 1,233,812 412,165 468,969 1,028,269 1,177,165 6,741,640 
Special Mention1 23,903 11,828 1,202 305 13,850 19,549 70,638 
Classified457 12,907 5,576 9,647 1,395 20,637 34,549 85,168 
Total$601,159 $1,857,369 $1,251,216 $423,014 $470,669 $1,062,756 $1,231,263 $6,897,446 
              Current-period gross
                  charge-offs		14 7 345 22 — 87 131 606 
Credit Quality - Consumer Type Loans
For consumer and residential loan classes, the Company primarily evaluates credit quality based on delinquency and accrual status of the loan, credit documentation and by payment activity. The performing or nonperforming status is updated on an on-going basis dependent upon improvement and deterioration in credit quality.
The following tables present the credit quality by classification (performing or nonperforming) of the Company's consumer type loan portfolio as of March 31, 2024 and December 31, 2023 and the gross charge-offs for the three months ended March 31, 2024 and the year ended December 31, 2023 by year of origination. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination.
As of and for the three months
     ended March 31, 2024
2024 2023 2022 2021 2020 PriorRevolving Loans Amortized Cost BasisTotal
Residential real estate:
1-to-4 family mortgage
Performing$43,291 $187,203 $492,643 $393,806 $143,618 $298,828 $— $1,559,389 
Nonperforming— 325 5,027 3,237 4,421 5,425 — 18,435 
Total43,291 187,528 497,670 397,043 148,039 304,253 — 1,577,824 
          Current-period gross
             charge-offs		— — — — — — — — 
Residential line of credit
Performing— — — — — — 547,097 547,097 
Nonperforming— — — — — — 2,209 2,209 
Total— — — — — — 549,306 549,306 
          Current-period gross
             charge-offs		— — — — — — 20 20 
Consumer and other
Performing25,887 109,013 87,312 42,673 33,415 114,071 5,849 418,220 
Nonperforming— 561 909 2,293 1,849 4,839 — 10,451 
       Total25,887 109,574 88,221 44,966 35,264 118,910 5,849 428,671 
           Current-period gross
             charge-offs		155 344 31 96 36 110 — 772 
Total consumer type loans
Performing69,178 296,216 579,955 436,479 177,033 412,899 552,946 2,524,706 
Nonperforming— 886 5,936 5,530 6,270 10,264 2,209 31,095 
        Total$69,178 $297,102 $585,891 $442,009 $183,303 $423,163 $555,155 $2,555,801 
            Current-period gross
             charge-offs		$155 $344 $31 $96 $36 $110 $20 $792 
As of and for the year ended
  December 31, 2023 		2023 2022 2021 2020 2019 PriorRevolving Loans Amortized Cost BasisTotal
Residential real estate:
1-to-4 family mortgage
Performing$198,537 $500,628 $399,338 $145,484 $81,905 $226,587 $— $1,552,479 
Nonperforming76 2,565 4,026 3,846 690 4,870 — 16,073 
Total198,613 503,193 403,364 149,330 82,595 231,457 — 1,568,552 
           Prior-period gross
               charge-offs		— 18 — 4 — 24 — 46 
Residential line of credit
Performing— — — — — — 528,439 528,439 
Nonperforming— — — — — — 2,473 2,473 
Total— — — — — — 530,912 530,912 
           Prior-period gross
               charge-offs		— — — — — — — — 
Consumer and other
Performing104,399 91,557 45,187 34,928 24,040 93,833 6,890 400,834 
Nonperforming528 1,025 2,562 1,819 1,264 3,841 — 11,039 
       Total104,927 92,582 47,749 36,747 25,304 97,674 6,890 411,873 
            Prior-period gross
               charge-offs		1,463 564 139 201 110 372 2 2,851 
Total consumer type loans
Performing302,936 592,185 444,525 180,412 105,945 320,420 535,329 2,481,752 
Nonperforming604 3,590 6,588 5,665 1,954 8,711 2,473 29,585 
       Total$303,540 $595,775 $451,113 $186,077 $107,899 $329,131 $537,802 $2,511,337 
             Prior-period gross
                 charge-offs		1,463 582 139 205 110 396 2 2,897 
Nonaccrual and Past Due Loans
Nonperforming loans include loans that are no longer accruing interest (nonaccrual loans) and loans past due ninety or more days and still accruing interest.
The following tables represent an analysis of the aging by class of financing receivable as of March 31, 2024 and December 31, 2023:
March 31, 202430-89 days
past due and accruing
interest		90 days or 
more and accruing
interest 		Nonaccrual
loans		Loans current
on payments
and accruing
interest 		Total
Commercial and industrial$1,606 $— $24,643 $1,595,362 $1,621,611 
Construction1,474 585 5,077 1,261,747 1,268,883 
Residential real estate:
1-to-4 family mortgage17,881 9,610 8,825 1,541,508 1,577,824 
Residential line of credit1,717 1,097 1,112 545,380 549,306 
Multi-family mortgage— — 31 615,050 615,081 
Commercial real estate:
Owner occupied465 — 3,069 1,232,473 1,236,007 
Non-owner occupied3,631 — 3,250 1,984,645 1,991,526 
Consumer and other10,699 1,566 8,885 407,521 428,671 
Total$37,473 $12,858 $54,892 $9,183,686 $9,288,909 
 
December 31, 202330-89 days
past due and accruing
interest		90 days or 
more and accruing
interest 		Nonaccrual
loans		Loans current on payments and accruing interest Total
Commercial and industrial$732 $— $21,730 $1,698,271 $1,720,733 
Construction6,579 165 2,872 1,387,697 1,397,313 
Residential real estate:
1-to-4 family mortgage21,768 9,355 6,718 1,530,711 1,568,552 
Residential line of credit2,464 1,337 1,136 525,975 530,912 
Multi-family mortgage— — 32 603,772 603,804 
Commercial real estate:
Owner occupied480 — 3,188 1,228,403 1,232,071 
Non-owner occupied4,059 — 3,351 1,936,115 1,943,525 
Consumer and other10,961 1,836 9,203 389,873 411,873 
Total$47,043 $12,693 $48,230 $9,300,817 $9,408,783 
The following tables provide the amortized cost basis of loans on non-accrual status, as well as any related allowance as of March 31, 2024 and December 31, 2023 by class of financing receivable.
March 31, 2024Nonaccrual
with no
related
allowance		Nonaccrual
with
related
allowance		Related
allowance
Commercial and industrial$14,465 $10,178 $3,946 
Construction3,152 1,925 293 
Residential real estate:
1-to-4 family mortgage3,336 5,489 167 
Residential line of credit812 300 5 
Multi-family mortgage— 31 1 
Commercial real estate:
Owner occupied1,935 1,134 145 
Non-owner occupied3,219 31 1 
Consumer and other— 8,885 463 
Total$26,919 $27,973 $5,021 
December 31, 2023
Nonaccrual
with no
related
allowance		Nonaccrual
with
related
allowance		Related
allowance
Commercial and industrial$3,678 $18,052 $5,011 
Construction2,267 605 59 
Residential real estate:
1-to-4 family mortgage1,444 5,274 103 
Residential line of credit685 451 8 
Multi-family mortgage— 32 1 
Commercial real estate:
Owner occupied2,920 268 15 
Non-owner occupied3,316 35 1 
Consumer and other— 9,203 498 
Total$14,310 $33,920 $5,696 
The following presents interest income recognized on nonaccrual loans for the three months ended March 31, 2024 and 2023:
Three Months Ended March 31,
20242023
Commercial and industrial$224 $20 
Construction61 6 
Residential real estate:
1-to-4 family mortgage— 79 
Residential line of credit16 24 
Multi-family mortgage— 1 
Commercial real estate:
Owner occupied49 58 
Non-owner occupied35 82 
Consumer and other— 173 
Total$385 $443 
Accrued interest receivable written off as an adjustment to interest income amounted to $201 and $181 for the three months ended March 31, 2024 and 2023, respectively.
Loan Modifications to Borrowers Experiencing Financial Difficulty
Occasionally, the Company may make certain modifications of loans to borrowers experiencing financial difficulty. These modifications may be in the form of an interest rate reduction, a term extension, principal forgiveness, payment deferral or a combination thereof. Upon the Company's determination that a modified loan has subsequently been deemed uncollectible, the portion of the loan deemed uncollectible is charged off against the allowance for credit losses on loans HFI. The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.
There were no modifications of loans to borrowers experiencing financial difficulty during the three months ended March 31, 2023.
The following table presents the amortized cost of FDM loans as of March 31, 2024 by class of financing receivable and type of concession granted that were modified during the three months ended March 31, 2024.
Term extensionPayment deferral and term extensionTotal% of total class of financing receivables
Construction$— $14,316 $14,316 1.1 %
Commercial real estate:
Non-owner occupied10,351 — 10,351 0.5 %
Consumer and other22 — 22 — %
     Total$10,373 $14,316 $24,689 0.3 %
No financing receivables that were modified in the prior twelve months had a payment default during the three months ended March 31, 2024. Defaults are defined as the earlier of the FDM being placed on non-accrual status or reaching 90 days past due with respect to principal and/or interest payments. As of March 31, 2024, there were no commitments to lend a material amount of additional funds to any borrower whose loan was classified as a FDM.
The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficultly:
Three Months Ended
March 31, 2024		Weighted average term extension
(in months)		Weighted average payment deferral
(in months)
Construction63
Commercial real estate:
Non-owner occupied6—
Consumer and other42—
The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The table below depicts the performance of loans held for investment as of March 31, 2024 made to borrowers experiencing financial difficulty that were modified in the prior twelve months.
March 31, 202430-89 days
past due and accruing
interest		90 days or 
more and accruing
interest
Nonaccrual
loans(1)
Loans current
on payments
and accruing
interest 		Total
Commercial and industrial$— $— $179 $— $179 
Construction— — — 14,316 14,316 
Residential real estate:
1-to-4 family mortgage— — 65 — 65 
Commercial real estate:
Non-owner occupied— — — 10,351 10,351 
Consumer and other— — — 22 22 
Total$— $— $244 $24,689 $24,933 
1) Loans were on non-accrual when modified and subsequently classified as FDM.
Collateral-Dependent Loans
For loans for which the repayment (based on the Company's assessment) is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, the following tables present the loans and the corresponding individually assessed allowance for credit losses by class of financing receivable. Significant changes in individually assessed reserves are due to changes in the valuation of the underlying collateral in addition to changes in accrual and past due status.
March 31, 2024
Type of Collateral
Real EstateFarmlandBusiness AssetsTotalIndividually assessed allowance for credit loss
Commercial and industrial$86 $363 $23,660 $24,109 $3,883 
Construction24,744 1,653 — 26,397 265 
Residential real estate:
1-to-4 family mortgage3,893 — — 3,893 58 
Residential line of credit1,384 — — 1,384 12 
Multi-family mortgage— — — — — 
Commercial real estate:
Owner occupied1,969 7,478 9,447 131 
Non-owner occupied14,731 — — 14,731 — 
Total$46,807 $9,494 $23,660 $79,961 $4,349 
December 31, 2023
Type of Collateral
Real EstateFarmlandBusiness AssetsTotalIndividually assessed allowance for credit loss
Commercial and industrial$— $363 $20,599 $20,962 $4,946 
Construction8,224 — — 8,224 30 
Residential real estate:
1-to-4 family mortgage5,317 — — 5,317 129 
Residential line of credit1,245 — — 1,245 10 
Commercial real estate:
Owner occupied1,975 1,160 — 3,135 — 
Non-owner occupied3,316 — — 3,316 — 
Consumer and other112 — — 112 21 
Total$20,189 $1,523 $20,599 $42,311 $5,136 
Allowance for Credit Losses on Loans HFI
The Company performed evaluations within its established qualitative framework, assessing the impact of the current economic outlook, including: continued actions taken by the Federal Reserve with regard to monetary policy, interest rates and the potential impact of those actions, potential impact of persistent high inflation on economic growth, potential negative economic forecasts, and other considerations. The increase in the allowance for credit losses on loans HFI as of March 31, 2024 compared with December 31, 2023 is primarily the result of expected deterioration in the CRE portfolio which was adjusted upward qualitatively to address risks not captured by the model. These adjustments factor in the possibility that the economy may be nearing a recession, reflected through deterioration in asset quality projected over life of the loan portfolio. As of March 31, 2024, all CRE asset classes are expected to be negatively impacted by slowing demand coupled with refinancing risk in the current rate environment.
The following tables provide the changes in the allowance for credit losses on loans HFI by class of financing receivable for the three months ended March 31, 2024 and 2023:
 Commercial
and industrial 		Construction1-to-4
family
residential
mortgage 		Residential
line of credit 		Multi-family
residential
mortgage 		Commercial
real estate
owner
occupied 		Commercial
real estate
non-owner
occupied 		Consumer
and other 		Total
Three Months Ended March 31, 2024
Beginning balance -
December 31, 2023
$19,599 $35,372 $26,505 $9,468 $8,842 $10,653 $22,965 $16,922 $150,326 
(Reversal of) provision for
    credit losses on loans
    HFI		(2,298)2,028 (433)470 131 56 984 914 1,852 
Recoveries of loans
previously charged-off
14 — 56 — — 40 — 306 416 
Loans charged off(43)(92)— (20)— — — (772)(927)
Ending balance -
March 31, 2024
$17,272 $37,308 $26,128 $9,918 $8,973 $10,749 $23,949 $17,370 $151,667 
 Commercial
and industrial 		Construction1-to-4
family
residential
mortgage 		Residential
line of credit 		Multi-family
residential
mortgage 		Commercial
real estate
owner
occupied 		Commercial
real estate
non-owner
occupied 		Consumer
and other 		Total
Three Months Ended March 31, 2023 
Beginning balance -
December 31, 2022
$11,106 $39,808 $26,141 $7,494 $6,490 $7,783 $21,916 $13,454 $134,192 
(Reversal of) provision for
    credit losses on loans
    HFI		(10)1,217 1,073 1,540 129 103 (48)993 4,997 
Recoveries of loans
previously charged-off
67 — 15 — — 66 — 239 387 
Loans charged off(46)— (16)— — — — (705)(767)
Ending balance -
March 31, 2023		$11,117 $41,025 $27,213 $9,034 $6,619 $7,952 $21,868 $13,981 $138,809