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Loans and Allowance for Credit Losses on Loans (Tables)

6 Months Ended

Jun. 30, 2022

Loans and Allowance for Credit Losses on Loans

Schedule of major classifications of loans


		June 30, 2022			December 31, 2021
Commercial ¹		$	806,725		$	771,474
Leases			230,677			176,031
Commercial real estate – Investor			1,076,678			957,389
Commercial real estate – Owner occupied			627,898			574,384
Construction			170,037			206,132
Residential real estate – Investor			61,220			63,399
Residential real estate – Owner occupied			207,836			213,248
Multifamily			310,706			309,164
HELOC			111,072			115,664
HELOC – Purchased			9,066			10,626
Other ²			13,155			23,293
Total loans			3,625,070			3,420,804
Allowance for credit losses on loans			(45,388)			(44,281)
Net loans³		$	3,579,682		$	3,376,523

¹ Includes $3.5 million and $38.4 million of Paycheck Protection Program (“PPP”) loans at June 30, 2022 and December 31, 2021, respectively.

² The “Other” segment includes consumer and overdrafts in this table and in subsequent tables within Note 4 - Loans and Allowance for Credit Losses on Loans.

³ Excludes accrued interest receivable of $11.0 million and $9.2 million at June 30, 2022 and December 31, 2021, respectively, that is recorded in other assets on the consolidated balance sheet.

Schedule of changes in the allowance for loan losses by segment of loans based on method of impairment



					Provision for
		Beginning			(Release of)									Ending
Allowance for credit losses		Balance			Credit Losses			Charge-offs			Recoveries			Balance
Three months ended June 30, 2022
Commercial		$	12,576		$	1,582		$	52		$	8		$	14,114
Leases			2,573			(837)			-			-			1,736
Commercial real estate – Investor			15,559			(1,400)			243			18			13,934
Commercial real estate – Owner occupied			3,270			3,703			-			7			6,980
Construction			2,858			(1,323)			-			-			1,535
Residential real estate – Investor			703			(47)			-			5			661
Residential real estate – Owner occupied			1,950			(103)			-			22			1,869
Multifamily			2,977			(543)			-			-			2,434
HELOC			1,594			(158)			-			31			1,467
HELOC – Purchased			81			(6)			-			-			75
Other			167			462			91			45			583
		$	44,308		$	1,330		$	386		$	136		$	45,388



					Provision for
		Beginning			(Release of)									Ending
Allowance for credit losses		Balance			Credit Losses			Charge-offs			Recoveries			Balance
Six months ended June 30, 2022
Commercial		$	11,751		$	2,407		$	82		$	38		$	14,114
Leases			3,480			(1,744)			-			-			1,736
Commercial real estate - Investor			13,093			1,280			480			41			13,934
Commercial real estate - Owner occupied			2,615			4,471			121			15			6,980
Construction			3,373			(1,838)			-			-			1,535
Residential real estate - Investor			760			(114)			-			15			661
Residential real estate - Owner occupied			2,832			(1,068)			-			105			1,869
Multifamily			3,675			(1,241)			-			-			2,434
HELOC			2,379			(979)			-			67			1,467
HELOC - Purchased			131			(56)			-			-			75
Other			192			532			217			76			583
		$	44,281		$	1,650		$	900		$	357		$	45,388



					(Release of)
		Beginning			Provision for									Ending
Allowance for credit losses		Balance			Credit Losses			Charge-offs			Recoveries			Balance
Three months ended June 30, 2021
Commercial		$	3,276		$	(485)		$	207		$	17		$	2,601
Leases			3,382			34			28			-			3,388
Commercial real estate – Investor			7,908			2,509			-			20			10,437
Commercial real estate – Owner occupied			1,722			(615)			31			10			1,086
Construction			3,719			(671)			-			-			3,048
Residential real estate – Investor			1,803			(838)			-			10			975
Residential real estate – Owner occupied			2,528			(723)			-			61			1,866
Multifamily			4,265			(999)			-			-			3,266
HELOC			1,713			(181)			5			77			1,604
HELOC – Purchased			295			(66)			-			-			229
Other			356			(228)			30			41			139
		$	30,967		$	(2,263)		$	301		$	236		$	28,639



					(Release of)
Allowance for credit losses		Beginning			Provision for									Ending
Six months ended June 30, 2021		Balance			Credit Losses			Charge-offs			Recoveries			Balance
Commercial		$	2,812		$	(39)		$	209		$	37		$	2,601
Leases			3,888			(472)			28			-			3,388
Commercial real estate – Investor			9,205			1,192			-			40			10,437
Commercial real estate – Owner occupied			2,251			(1,349)			34			218			1,086
Construction			4,054			(1,006)			-			-			3,048
Residential real estate – Investor			1,740			(1,041)			-			276			975
Residential real estate – Owner occupied			2,714			(958)			-			110			1,866
Multifamily			3,625			(359)			-			-			3,266
HELOC			1,749			(229)			17			101			1,604
HELOC – Purchased			199			30			-			-			229
Other			1,618			(1,502)			55			78			139
		$	33,855		$	(5,733)		$	343		$	860		$	28,639

The ACL on loans excludes $3.4 million, $4.5 million and $2.2 million of allowance for unfunded commitments as of June 30, 2022, December 31, 2021 and June 30, 2021, respectively, recorded within Other Liabilities. The total ACL on unfunded commitments listed as of June 30, 2022 and December 31, 2021 excludes the purchase accounting adjustment of $1.3 million and $1.7 million, respectively, recorded due to our acquisition of West Suburban, which is also recorded within Other Liabilities, and is being accreted in interest income over the estimated life of the unused commitments.

The following tables presents the collateral dependent loans and the related ACL allocated by segment of loans as of June 30, 2022 and December 31, 2021:


					Accounts												ACL
June 30, 2022		Real Estate			Receivable			Equipment			Other			Total			Allocation
Commercial		$	907		$	9,067		$	-		$	1,091		$	11,065		$	2,610
Leases			-			-			2,002			-			2,002			323
Commercial real estate – Investor			5,293			-			-			-			5,293			-
Commercial real estate – Owner occupied			22,597			-			-			2,450			25,047			4,228
Construction			150			-			-			-			150			-
Residential real estate – Investor			965			-			-			-			965			-
Residential real estate – Owner occupied			3,112			-			-			-			3,112			254
Multifamily			1,010			-			-			-			1,010			-
HELOC			1,967			-			-			-			1,967			-
HELOC – Purchased			171			-			-			-			171			-
Other			-			-			-			-			-			-
Total		$	36,172		$	9,067		$	2,002		$	3,541		$	50,782		$	7,415


					Accounts												ACL
December 31, 2021		Real Estate			Receivable			Equipment			Other			Total			Allocation
Commercial		$	1,986		$	9,901		$	-		$	-		$	11,887		$	2,677
Leases			-			-			3,249			505			3,754			811
Commercial real estate – Investor			5,693			-			-			-			5,693			-
Commercial real estate – Owner occupied			9,147			-			-			2,490			11,637			362
Construction			2,104			-			-			-			2,104			992
Residential real estate – Investor			925			-			-			-			925			-
Residential real estate – Owner occupied			4,271			-			-			-			4,271			276
Multifamily			1,845			-			-			-			1,845			75
HELOC			826			-			-			-			826			190
HELOC – Purchased			180			-			-			-			180			-
Other			-			-			-			7			7			4
Total		$	26,977		$	9,901		$	3,249		$	3,002		$	43,129		$	5,387

Schedule of aged analysis of past due loans by class of loans


																				90 days or
								90 Days or												Greater Past
		30-59 Days			60-89 Days			Greater Past			Total Past									Due and
June 30, 2022		Past Due			Past Due			Due			Due			Current			Total Loans			Accruing
Commercial		$	1,093		$	1,628		$	2,134		$	4,855		$	801,870		$	806,725		$	979
Leases			-			-			1,508			1,508			229,169			230,677			-
Commercial real estate - Investor			17,732			3,489			3,143			24,364			1,052,314			1,076,678			3,150
Commercial real estate - Owner occupied			116			3,127			3,055			6,298			621,600			627,898			1,107
Construction			-			-			-			-			170,037			170,037			-
Residential real estate - Investor			-			69			1,011			1,080			60,140			61,220			38
Residential real estate - Owner occupied			2,365			717			2,149			5,231			202,605			207,836			-
Multifamily			985			-			-			985			309,721			310,706			-
HELOC			322			51			392			765			110,307			111,072			-
HELOC - Purchased			-			-			171			171			8,895			9,066			-
Other			607			-			-			607			12,548			13,155			-
Total		$	23,220		$	9,081		$	13,563		$	45,864		$	3,579,206		$	3,625,070		$	5,274


																				90 days or
								90 Days or												Greater Past
		30-59 Days			60-89 Days			Greater Past			Total Past									Due and
December 31, 2021¹		Past Due			Past Due			Due			Due			Current			Total Loans			Accruing
Commercial		$	3,407		$	1,413		$	1,828		$	6,648		$	764,826		$	771,474		$	1,396
Leases			125			-			1,571			1,696			174,335			176,031			-
Commercial real estate – Investor			-			267			1,107			1,374			956,015			957,389			-
Commercial real estate – Owner occupied			2,324			500			4,848			7,672			566,712			574,384			1,594
Construction			854			-			-			854			205,278			206,132			-
Residential real estate – Investor			395			470			792			1,657			61,742			63,399			23
Residential real estate – Owner occupied			1,994			591			3,077			5,662			207,586			213,248			97
Multifamily			-			1,046			-			1,046			308,118			309,164			-
HELOC			193			23			218			434			115,230			115,664			-
HELOC – Purchased			-			-			180			180			10,446			10,626			-
Other			50			46			23			119			23,174			23,293			-
Total		$	9,342		$	4,356		$	13,644		$	27,342		$	3,393,462		$	3,420,804		$	3,110

¹ Loans modified under the CARES Act are considered current if they are in compliance with the modified terms.

Schedule of loans on nonaccrual for which there was no related allowance


Nonaccrual loan detail		June 30, 2022			With no ACL			December 31, 2021			With no ACL
Commercial		$	10,621		$	2,354		$	11,894		$	9,217
Leases			2,005			235			3,754			2,943
Commercial real estate - Investor			5,174			5,174			5,694			5,694
Commercial real estate - Owner occupied			9,563			6,975			11,637			11,205
Construction			150			150			160			160
Residential real estate - Investor			1,054			1,054			876			876
Residential real estate - Owner occupied			3,642			3,388			4,898			4,622
Multifamily			907			907			1,573			1,573
HELOC			2,422			2,422			862			672
HELOC - Purchased			171			171			180			180
Other			3			3			3			3
Total		$	35,712		$	22,833		$	41,531		$	37,145

Schedule of credit quality indicators by class of loans


																							Revolving
																							Loans
																							Converted
																				Revolving			To Term
		2022			2021			2020			2019			2018			Prior			Loans			Loans			Total
Commercial
Pass		$	101,846		$	84,311		$	34,286		$	16,069		$	13,178		$	32,438		$	468,212		$	-		$	750,340
Special Mention			88			15,326			1,394			3,160			-			-			4,840			-			24,808
Substandard			8,825			3,594			3,309			13,395			22			60			2,372			-			31,577
Total commercial			110,759			103,231			38,989			32,624			13,200			32,498			475,424			-			806,725

Leases
Pass			85,782			74,574		$	34,929			24,334			7,054			1,713			-			-			228,386
Special Mention			-			-			-			286			-			-			-			-			286
Substandard			-			-			-			1,770			-			235			-			-			2,005
Total leases			85,782			74,574			34,929			26,390			7,054			1,948			-			-			230,677

Commercial real estate – investor
Pass			245,689			310,869			185,655			83,699			52,267			85,785			19,968			-			983,932
Special Mention			-			4,955			28,904			28,480			-			-			-			-			62,339
Substandard			-			3,979			-			23,240			-			3,188			-			-			30,407
Total commercial real estate – investor			245,689			319,803			214,559			135,419			52,267			88,973			19,968			-			1,076,678

Commercial real estate – owner occupied
Pass			71,396			178,903			97,521			63,526			53,156			107,040			1,640			-			573,182
Special Mention			8,405			-			8,766			8,830			-			-			-			-			26,001
Substandard			207			22,345			1,196			1,679			-			3,288			-			-			28,715
Total commercial real estate – owner occupied			80,008			201,248			107,483			74,035			53,156			110,328			1,640			-			627,898

Construction
Pass			21,503			70,850			49,606			2,596			2,828			1,678			2,806			-			151,867
Special Mention			-			1,497			5,224			10,211			-			-			-			-			16,932
Substandard			1,238			-			-			-			-			-			-			-			1,238
Total construction			22,741			72,347			54,830			12,807			2,828			1,678			2,806			-			170,037

Residential real estate – investor
Pass			12,597			11,037			7,308			9,722			5,623			12,613			1,074			-			59,974
Special Mention			-			-			-			-			-			-			-			-			-
Substandard			-			-			-			506			191			549			-			-			1,246
Total residential real estate – investor			12,597			11,037			7,308			10,228			5,814			13,162			1,074			-			61,220

Residential real estate – owner occupied
Pass			2,524			45,874			29,768			16,812			13,000			94,011			1,446			-			203,435
Special Mention			-			616			-			-			-			-			-			-			616
Substandard			-			254			241			712			132			2,446			-			-			3,785
Total residential real estate – owner occupied			2,524			46,744			30,009			17,524			13,132			96,457			1,446			-			207,836

Multifamily
Pass			56,793			109,808			43,793			28,315			54,875			8,868			54			-			302,506
Special Mention			-			-			-			6,864			-			-			-			-			6,864
Substandard			429			-			-			-			621			286			-			-			1,336
Total multifamily			57,222			109,808			43,793			35,179			55,496			9,154			54			-			310,706

HELOC
Pass			225			365			537			1,617			679			2,822			102,036			-			108,281
Special Mention			-			-			-			110			-			-			-			-			110
Substandard			-			378			1,010			31			71			873			318			-			2,681
Total HELOC			225			743			1,547			1,758			750			3,695			102,354			-			111,072

HELOC – purchased

Pass			-			-			-			-			-			-			8,894			-			8,894
Special Mention			-			-			-			-			-			-			-			-			-
Substandard			-			-			-			-			-			172			-			-			172
Total HELOC – purchased			-			-			-			-			-			172			8,894			-			9,066

Other
Pass			1,467			3,900			608			281			88			1,263			5,546			-			13,153
Special Mention			-			-			-			-			-			-			-			-			-
Substandard			-			-			2			-			-			-			-			-			2
Total other			1,467			3,900			610			281			88			1,263			5,546			-			13,155

Total loans
Pass			599,822			890,491			484,011			246,971			202,748			348,231			611,676			-			3,383,950
Special Mention			8,493			22,394			44,288			57,941			-			-			4,840			-			137,956
Substandard			10,699			30,550			5,758			41,333			1,037			11,097			2,690			-			103,164
Total loans		$	619,014		$	943,435		$	534,057		$	346,245		$	203,785		$	359,328		$	619,206		$	-		$	3,625,070

Credit quality indicators by loan segment and loan origination date at December 31, 2021, were as follows:


																							Revolving
																							Loans
																							Converted
																				Revolving			To Term
		2021			2020			2019			2018			2017			Prior			Loans			Loans			Total
Commercial
Pass		$	192,258		$	50,638		$	38,614		$	28,177		$	5,176		$	10,945		$	408,394		$	30		$	734,232
Special Mention			44			84			694			-			-			-			3,708			-			4,530
Substandard			9,498			4,048			14,121			326			-			75			4,644			-			32,712
Total commercial			201,800			54,770			53,429			28,503			5,176			11,020			416,746			30			771,474

Leases
Pass			83,402			44,129		$	32,259			8,950			1,170			2,367			-			-			172,277
Special Mention			-			-			-			-			-			-			-			-			-
Substandard			-			-			2,834			623			-			297			-			-			3,754
Total leases			83,402			44,129			35,093			9,573			1,170			2,664			-			-			176,031

Commercial real estate – Investor
Pass			315,247			233,964			147,511			85,049			64,810			55,523			18,602			-			920,706
Special Mention			15,466			-			10,550			-			-			-			-			-			26,016
Substandard			2,238			2,378			451			181			3,612			1,807			-			-			10,667
Total commercial real estate – investor			332,951			236,342			158,512			85,230			68,422			57,330			18,602			-			957,389

Commercial real estate – Owner occupied
Pass			220,324			96,607			61,511			60,915			54,236			59,887			2,522			-			556,002
Special Mention			-			-			2,953			-			-			-			-			-			2,953
Substandard			8,318			942			1,686			-			1,251			3,232			-			-			15,429
Total commercial real estate – owner occupied			228,642			97,549			66,150			60,915			55,487			63,119			2,522			-			574,384

Construction
Pass			88,620			65,629			37,169			2,727			477			1,193			1,143			-			196,958
Special Mention			-			2,138			4,932			-			-			-			-			-			7,070
Substandard			160			-			-			1,944			-			-			-			-			2,104
Total construction			88,780			67,767			42,101			4,671			477			1,193			1,143			-			206,132

Residential real estate – Investor
Pass			13,371			9,758			13,084			6,392			7,059			10,602			1,868			-			62,134
Special Mention			-			-			-			-			-			-			-			-			-
Substandard			121			144			-			197			385			418			-			-			1,265
Total residential real estate – investor			13,492			9,902			13,084			6,589			7,444			11,020			1,868			-			63,399

Residential real estate – Owner occupied
Pass			48,009			31,912			20,990			13,304			30,562			60,661			2,052			-			207,490
Special Mention			659			-			-			-			-			-			-			-			659
Substandard			322			183			6			1,219			176			3,193			-			-			5,099
Total residential real estate – owner occupied			48,990			32,095			20,996			14,523			30,738			63,854			2,052			-			213,248

Multifamily
Pass			109,175			71,748			39,293			61,190			11,399			7,117			64			-			299,986
Special Mention			-			-			6,900			-			-			-			-			-			6,900
Substandard			433			-			-			1,543			302			-			-			-			2,278
Total multifamily			109,608			71,748			46,193			62,733			11,701			7,117			64			-			309,164

HELOC
Pass			907			2,091			2,131			805			1,667			1,869			104,843			-			114,313
Special Mention			-			-			-			-			-			-			108			-			108
Substandard			-			-			-			17			12			196			1,018			-			1,243
Total HELOC			907			2,091			2,131			822			1,679			2,065			105,969			-			115,664

HELOC – Purchased
Pass			-			-			-			-			-			10,446			-			-			10,446
Special Mention			-			-			-			-			-			-			-			-			-
Substandard			-			-			-			-			-			180			-			-			180
Total HELOC – purchased			-			-			-			-			-			10,626			-			-			10,626

Other
Pass			8,659			1,099			437			254			1,414			4,214			7,206			-			23,283
Special Mention			-			-			-			-			-			-			-			-			-
Substandard			-			3			-			7			-			-			-			-			10
Total other			8,659			1,102			437			261			1,414			4,214			7,206			-			23,293

Total loans
Pass			1,079,972			607,575			392,999			267,763			177,970			224,824			546,694			30			3,297,827
Special Mention			16,169			2,222			26,029			-			-			-			3,816			-			48,236
Substandard			21,090			7,698			19,098			6,057			5,738			9,398			5,662			-			74,741
Total loans		$	1,117,231		$	617,495		$	438,126		$	273,820		$	183,708		$	234,222		$	556,172		$	30		$	3,420,804