Loans and Allowance For Credit Losses (Tables)

3 Months Ended

Mar. 31, 2024

Loans and Leases Receivable Disclosure [Line Items]

Summary of Outstanding Loans

Outstanding loans as of March 31, 2024 and December 31, 2023 are summarized below. Certain loans have been pledged to secure borrowing arrangements (see Note 4).

(Dollars in thousands)	March 31, 2024			December 31, 2023
Commercial and industrial	$	610,459		$	626,615
Real estate - other		834,143			849,306
Real estate - construction and land		35,886			44,186
SBA		3,919			4,032
Other		36,484			35,394
Total loans, gross		1,520,891			1,559,533
Deferred loan origination costs, net		1,223			1,107
Allowance for credit losses		(15,981	)		(16,028	)
Total loans, net	$	1,506,133		$	1,544,612

Summary of Investment in Loans by Credit Quality Indicators

The following table reflects the Company’s recorded investment in loans by credit quality indicators and by year of origination as of March 31, 2024.

	Term Loans by Year of Origination
(Dollars in thousands)	2024		2023		2022		2021		2020		Prior		Revolving		Total
Commercial and industrial
Pass	$	2,575	$	79,677	$	131,880	$	51,887	$	14,380	$	58,129	$	212,976	$	551,504
Special mention		—		117		250		1,815		442		937		22,159		25,720
Substandard		—		751		10,173		2,445		57		431		19,378		33,235
Total	$	2,575	$	80,545	$	142,303	$	56,147	$	14,879	$	59,497	$	254,513	$	610,459
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Real estate - other
Pass	$	6,979	$	41,701	$	186,703	$	187,023	$	83,281	$	210,914	$	69,193	$	785,794
Special mention		—		—		4,267		33,165		—		4,137		—		41,569
Substandard		—		—		—		1,638		—		5,142		—		6,780
Total	$	6,979	$	41,701	$	190,970	$	221,826	$	83,281	$	220,193	$	69,193	$	834,143
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Real estate - construction and land
Pass	$	—	$	4,786	$	3,535	$	8,806	$	—	$	—	$	—	$	17,127
Special mention		—		—		—		14,227		—		—		—		14,227
Substandard		—		2,889		—		—		—		1,643		—		4,532
Total	$	—	$	7,675	$	3,535	$	23,033	$	—	$	1,643	$	—	$	35,886
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
SBA
Pass	$	—	$	—	$	734	$	—	$	—	$	2,243	$	102	$	3,079
Special mention		—		—		—		—		—		88		—		88
Substandard		—		—		—		—		—		752		—		752
Total	$	—	$	—	$	734	$	—	$	—	$	3,083	$	102	$	3,919
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	309	$	—	$	309
Other
Pass	$	33	$	28	$	1,372	$	—	$	148	$	32,451	$	2,452	$	36,484
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Total	$	33	$	28	$	1,372	$	—	$	148	$	32,451	$	2,452	$	36,484
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	130	$	—	$	130
Total
Pass	$	9,587	$	126,192	$	324,224	$	247,716	$	97,809	$	303,737	$	284,723	$	1,393,988
Special mention		—		117		4,517		49,207		442		5,162		22,159		81,604
Substandard		—		3,640		10,173		4,083		57		7,968		19,378		45,299
Total	$	9,587	$	129,949	$	338,914	$	301,006	$	98,308	$	316,867	$	326,260	$	1,520,891
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	439	$	—	$	439

The following table reflects the Company’s recorded investment in loans by credit quality indicators and by year of origination as of December 31, 2023.

	Term Loans by Year of Origination
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving		Total
Commercial and industrial
Pass	$	86,292	$	136,525	$	55,779	$	15,517	$	27,484	$	35,217	$	206,037	$	562,851
Special mention		124		3,700		1,940		502		730		336		24,048		31,380
Substandard		751		10,888		1,319		111		443		—		18,872		32,384
Total	$	87,167	$	151,113	$	59,038	$	16,130	$	28,657	$	35,553	$	248,957	$	626,615
Current period gross charge-offs	$	—	$	136	$	—	$	—	$	—	$	20	$	247	$	403
Real estate - other
Pass	$	44,570	$	181,849	$	186,142	$	84,708	$	58,419	$	160,252	$	83,755	$	799,695
Special mention		—		4,293		33,356		—		1,575		3,575		—		42,799
Substandard		—		—		1,649		—		587		4,576		—		6,812
Total	$	44,570	$	186,142	$	221,147	$	84,708	$	60,581	$	168,403	$	83,755	$	849,306
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Real estate - construction and land
Pass	$	3,982	$	10,134	$	25,544	$	—	$	—	$	—	$	—	$	39,660
Special mention		2,871		—		—		—		—		—		—		2,871
Substandard		—		—		—		—		—		1,655		—		1,655
Total	$	6,853	$	10,134	$	25,544	$	—	$	—	$	1,655	$	—	$	44,186
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
SBA
Pass	$	—	$	747	$	17	$	—	$	570	$	1,721	$	108	$	3,163
Special mention		—		—		—		—		—		102		—		102
Substandard		—		—		—		—		398		369		—		767
Total	$	—	$	747	$	17	$	—	$	968	$	2,192	$	108	$	4,032
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Other
Pass	$	—	$	1,511	$	—	$	169	$	—	$	33,329	$	385	$	35,394
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Total	$	—	$	1,511	$	—	$	169	$	—	$	33,329	$	385	$	35,394
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total
Pass	$	134,844	$	330,766	$	267,482	$	100,394	$	86,473	$	230,519	$	290,285	$	1,440,763
Special mention		2,995		7,993		35,296		502		2,305		4,013		24,048		77,152
Substandard		751		10,888		2,968		111		1,428		6,600		18,872		41,618
Total	$	138,590	$	349,647	$	305,746	$	101,007	$	90,206	$	241,132	$	333,205	$	1,559,533
Current period gross charge-offs	$	—	$	136	$	—	$	—	$	—	$	20	$	247	$	403

Summary of Aging Analysis of the Loan Portfolio by the Time Past Due

The following table reflects an aging analysis of the loan portfolio by the time past due at March 31, 2024 and December 31, 2023.

(Dollars in thousands)	30 Days		60 Days		90+ Days		Nonaccrual		Current		Total
As of March 31, 2024:
Commercial and industrial	$	4,933	$	—	$	—	$	1,159	$	604,367	$	610,459
Real estate - other		5,044		—		—		—		829,099		834,143
Real estate - construction and land		—		16,793		—		—		19,093		35,886
SBA		—		398		—		53		3,468		3,919
Other		241		169		240		—		35,834		36,484
Total loans, gross	$	10,218	$	17,360	$	240	$	1,212	$	1,491,861	$	1,520,891
As of December 31, 2023:
Commercial and industrial	$	—	$	—	$	—	$	3,728	$	622,887	$	626,615
Real estate - other		1,824		—		—		—		847,482		849,306
Real estate - construction and land		—		—		—		—		44,186		44,186
SBA		—		—		—		53		3,979		4,032
Other		—		—		—		—		35,394		35,394
Total loans, gross	$	1,824	$	—	$	—	$	3,781	$	1,553,928	$	1,559,533

Schedule of Amortized Cost of Individually Evaluated Loans by Type of Collateral

The following table reflects the Company’s collateral dependent loans by portfolio segment and by type of collateral as of March 31, 2024 and December 31, 2023.

(Dollars in thousands)	Residential Property		Business Assets		Total Collateral Dependent Loans
As of March 31, 2024:
Commercial and industrial	$	—	$	8,785	$	8,785
SBA		451		—		451
Total collateral dependent loans	$	451	$	8,785	$	9,236
As of December 31, 2023:
Commercial and industrial	$	—	$	3,728	$	3,728
SBA		53		—		53
Total collateral dependent loans	$	53	$	3,728	$	3,781

Summary of Information Related to Impaired Loans

The following table reflects nonaccrual loans by portfolio segment as of March 31, 2024 and December 31, 2023.

(Dollars in thousands)	Nonaccrual Loans with No Allowance		Nonaccrual Loans with an Allowance		Total Nonaccrual Loans
As of March 31, 2024:
Commercial and industrial	$	1,159	$	—	$	1,159
SBA		53		—		53
Total nonaccrual loans	$	1,212	$	—	$	1,212
As of December 31, 2023:
Commercial and industrial	$	3,708	$	20	$	3,728
SBA		53		—		53
Total nonaccrual loans	$	3,761	$	20	$	3,781

Summary of Allowance for Loan Losses

The following table reflects the changes in, and allocation of, the allowance for credit losses and allowance for loan losses by portfolio segment for the three months ended March 31, 2024 and 2023.

(Dollars in thousands)	Commercial and Industrial			Real Estate Other			Real Estate Construction and Land			SBA			Other			Total
Three months ended March 31, 2024:
Beginning balance	$	10,853		$	3,218		$	492		$	521		$	944		$	16,028
Provision for credit losses		231			(120	)		50			(7	)		147			301
Charge-offs		—			—			—			(309	)		(130	)		(439	)
Recoveries		91			—			—			—			—			91
Ending balance	$	11,175		$	3,098		$	542		$	205		$	961		$	15,981
Allowance for credit losses / gross loans		1.83	%		0.37	%		1.51	%		5.23	%		2.63	%		1.05	%
Net recoveries (charge-offs) / gross loans		0.01	%		0.00	%		0.00	%		-7.88	%		-0.36	%		-0.02	%
Three months ended March 31, 2023:
Beginning balance	$	10,620		$	5,322		$	884		$	132		$	47		$	17,005
Adoption of new accounting standard		(1,566	)		(1,725	)		1			(91	)		1,541			(1,840	)
Provision for credit losses		1,912			(654	)		(142	)		1			(653	)		464
Charge-offs		(247	)		—			—			—			—			(247	)
Recoveries		—			—			—			—			—			—
Ending balance	$	10,719		$	2,943		$	743		$	42		$	935		$	15,382
Allowance for loan losses / gross loans		1.63	%		0.34	%		1.16	%		0.75	%		2.48	%		0.95	%
Net recoveries (charge-offs) / gross loans		-0.04	%		0.00	%		0.00	%		0.00	%		0.00	%		-0.02	%

Summary of Type of Concession Granted and the Financial Effect of the Modification

The following table reflects the type of concession granted and the financial effect of the modifications for the three months ended March 31, 2024.

(Dollars in thousands)	Amortized Cost		% of Total Portfolio Segment			Financial Effect
Commercial and industrial	$	11,065		1.81	%	Term Extension - maturity date extended from March 15, 2024 to December 15, 2024
Commercial and industrial		3,641		0.60	%	Term Extension - maturity date extended from January 31, 2024 to April 30, 2024
Total modified loans	$	14,706