
	2021		2020
Commercial	$	2,414,787	$	2,181,552
Commercial real estate	1,176,973		1,156,668
Residential real estate	437,116		503,828
Consumer	17,766		14,233
Total loans	4,046,642		3,856,281
Deferred costs, fees, premiums, and discounts	(9,519)		(9,924)
Allowance for loan losses	(47,547)		(47,766)
Total loans, net	$	3,989,576	$	3,798,591

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law. A provision in the CARES Act created the Paycheck Protection Program (PPP), a program administered by the Small Business Administration (“SBA”) to provide loans to small business during the COVID-19 pandemic. As of December 31, 2021 and 2020, we had $68,401 and $256,336 of PPP loans outstanding and deferred processing fees outstanding of $1,652 and $5,235, respectively. PPP loans are classified as Commercial loans in the consolidated financial statements. No allowance for loan losses has been recognized for PPP loans as such loans are guaranteed by the SBA.


	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Total
2021
Allowance for loan losses:
Balance, beginning of year	$	32,009	$	13,863	$	1,606	$	288	$	47,766
Provision for (benefit from) loan losses	4,017		(617)		(452)		52		3,000
Loans charged off	(4,296)		(375)		(42)		(148)		(4,861)
Recoveries	1,547		28		24		43		1,642
Balance, end of year	$	33,277	$	12,899	$	1,136	$	235	$	47,547
2020
Allowance for loan losses:
Balance, beginning of year	$	17,509	$	9,645	$	1,056	$	336	$	28,546
Provision for loan losses	17,979		4,527		474		120		23,100
Loans charged off	(4,064)		(581)		(39)		(216)		(4,900)
Recoveries	585		272		115		48		1,020
Balance, end of year	$	32,009	$	13,863	$	1,606	$	288	$	47,766
2019
Allowance for loan losses:
Balance, beginning of year	$	13,158	$	11,774	$	1,201	$	266	$	26,399
Provision for loan losses	7,887		(2,088)		(21)		272		6,050
Loans charged off	(4,171)		(325)		(272)		(281)		(5,049)
Recoveries	635		284		148		79		1,146
Balance, end of year	$	17,509	$	9,645	$	1,056	$	336	$	28,546


	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Total
2021
Loans:
Individually evaluated for impairment	$	17,460	$	4,781	$	11,479	$	2	$	33,722
Collectively evaluated for impairment	2,397,327		1,172,192		425,637		17,764		4,012,920
Total loans	$	2,414,787	$	1,176,973	$	437,116	$	17,766	$	4,046,642
Allowance for loan losses:
Individually evaluated for impairment	$	2,517	$	12	$	39	$	—	$	2,568
Collectively evaluated for impairment	30,760		12,887		1,097		235		44,979
Total allowance for loan losses	$	33,277	$	12,899	$	1,136	$	235	$	47,547
2020
Loans:
Individually evaluated for impairment	$	23,197	$	2,933	$	9,630	$	38	$	35,798
Collectively evaluated for impairment	2,158,355		1,153,735		494,198		14,195		3,820,483
Total loans	$	2,181,552	$	1,156,668	$	503,828	$	14,233	$	3,856,281
Allowance for loan losses:
Individually evaluated for impairment	$	3,972	$	12	$	96	$	—	$	4,080
Collectively evaluated for impairment	28,037		13,851		1,510		288		43,686
Total allowance for loan losses	$	32,009	$	13,863	$	1,606	$	288	$	47,766


	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment
2021
With no related allowance recorded:
Commercial	$	14,619	$	13,982	$	—	$	10,637
Commercial real estate	4,795		4,706		—		3,943
Residential real estate	10,754		10,808		—		7,223
Consumer	3		2		—		3
Total loans with no related allowance recorded	30,171		29,498		—		21,806
With an allowance recorded:
Commercial	3,666		3,478		2,517		2,375
Commercial real estate	124		75		12		57
Residential real estate	665		671		39		462

Total loans an allowance recorded	4,455		4,224		2,568		2,894
Total impaired loans	$	34,626	$	33,722	$	2,568	$	24,700
2020
With no related allowance recorded:
Commercial	$	16,370	$	15,756	$	—	$	12,189
Commercial real estate	2,850		2,838		—		1,910
Residential real estate	9,021		8,933		—		5,855
Consumer	38		38		—		29
Total loans with no related allowance recorded	28,279		27,565		—		19,983
With an allowance recorded:
Commercial	7,610		7,441		3,972		5,304
Commercial real estate	133		95		12		67
Residential real estate	709		697		96		479

Total loans an allowance recorded	8,452		8,233		4,080		5,850
Total impaired loans	$	36,731	$	35,798	$	4,080	$	25,833

Credit risk monitoring and management is a continuous process to manage the quality of the loan portfolio. We categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt including current financial information, historical payment experience, credit documentation, public information and current economic trends among other factors. The risk rating system is used as a tool to analyze and monitor loan portfolio quality. Risk ratings meeting an internally specified exposure threshold are updated annually, or more frequently upon the occurrence of a circumstance that affects the credit risk of the loan. We use the following definitions for risk ratings:

Substandard - loans are considered “classified” and have a well-defined weakness, or weaknesses, such as loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans are also characterized by the distinct possibility of loss in the future if the deficiencies are not corrected.

Doubtful - loans are considered “classified” and have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. There were no loans categorized as doubtful as of December 31, 2021 and 2020.


	Non-Classified		Classified		Total
2021
Commercial	$	2,384,275	$	30,512	$	2,414,787
Commercial real estate	1,146,673		30,300		1,176,973
Residential real estate	431,033		6,083		437,116
Consumer	17,762		4		17,766
Total loans	$	3,979,743	$	66,899	$	4,046,642

2020
Commercial	$	2,145,831	$	35,721	$	2,181,552
Commercial real estate	1,126,080		30,588		1,156,668
Residential real estate	494,155		9,673		503,828
Consumer	14,195		38		14,233
Total loans	$	3,780,261	$	76,020	$	3,856,281


	Loans Not Past Due		Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans Greater than 90 Days Past Due, Still Accruing		Nonaccrual		Total
2021
Commercial	$	2,392,205	$	5,467	$	623	$	—	$	16,492	$	2,414,787
Commercial real estate	1,160,244		10,887		—		1,061		4,781		1,176,973
Residential real estate	424,860		5,794		410		—		6,052		437,116
Consumer	17,719		45		—		—		2		17,766
Total loans	$	3,995,028	$	22,193	$	1,033	$	1,061	$	27,327	$	4,046,642
2020
Commercial	$	2,147,310	$	11,415	$	48	$	—	$	22,779	$	2,181,552
Commercial real estate	1,144,801		8,933		—		—		2,934		1,156,668
Residential real estate	489,482		2,948		1,123		777		9,498		503,828
Consumer	14,187		8		—		—		38		14,233
Total loans	$	3,795,780	$	23,304	$	1,171	$	777	$	35,249	$	3,856,281

The modification of the terms of the loans performed for the years ended December 31, 2021 and 2020 respectively, included rate modifications, extensions of the maturity dates or a permanent reduction of the recorded investment in the loans.


	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
2021
Commercial	7	$	6,969	$	6,178
Commercial real estate	1	2,295		2,265
Residential real estate	4	1,386		1,435

Total	12	$	10,650	$	9,878
2020
Commercial	11	$	2,950	$	2,831

Residential real estate	5	917		907

Total	16	$	3,867	$	3,738

For the years ended December 31, 2021, 2020 and 2019 the TDRs described above increased the allowance for loan losses by $2,326, $1,464 and $105, respectively. There were no amounts charged-off during the years ended December 31, 2021, 2020 and 2019. For the year ended December 31, 2020, there were loans modified as TDRs totaling $1,759 for which there was a payment default following the modification.

In order to assess whether a borrower is experiencing financial difficulty, an evaluation is performed to determine the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under our internal underwriting policy.

We are working with borrowers impacted by COVID-19 and providing modifications to include interest only deferral or principal and interest deferral. These modifications are excluded from TDR classification under Section 4013 of the CARES Act or under applicable interagency guidance of the federal banking regulators. We had actively modified loans under the CARES Act as follows as of December 31,:

Included in the net loan portfolio as of December 31, 2021 and 2020 is a net accretable discount related to loans acquired within a business combination in the approximate amounts of $571 and $2,043, respectively. The discount is accreted into income on a level-yield basis over the life of the loans.

Loans acquired with evidence of credit quality deterioration at acquisition, for which it was probable that we would not be able to collect all contractual amounts due, were accounted for as purchased credit impaired (“PCI”) loans. The outstanding balance represents the total amount owed, including accrued but unpaid interest, and any amounts previously charged off. The carrying amount of purchased credit impaired loans is not significant as of December 31, 2021 and 2020.