Loans and Allowance for Credit Losses on Loans (Tables)

12 Months Ended

Dec. 31, 2022

Loans and Allowance for Credit Losses on Loans

Schedule of major classifications of loans

	December 31, 2022		December 31, 2021
Commercial 1	$	840,964	$	771,474
Leases		277,385		176,031
Commercial real estate – investor		987,635		799,928
Commercial real estate – owner occupied		854,879		731,845
Construction		180,535		206,132
Residential real estate – investor		57,353		63,399
Residential real estate – owner occupied		219,718		213,248
Multifamily		323,691		309,164
HELOC		109,202		126,290
Other 2		18,247		23,293
Total loans		3,869,609		3,420,804
Allowance for credit losses on loans		(49,480)		(44,281)
Net loans 3	$	3,820,129	$	3,376,523

¹ Includes $1.6 million and $38.4 million of PPP loans outstanding at December 31, 2022 and 2021, respectively.

²  Unless otherwise noted, the “Other” segment includes consumer loans and overdrafts in this table and in subsequent tables within Note 5 - Loans and Allowance for Credit Losses on Loans.

³  Excludes accrued interest receivable of $15.9 million and $9.2 million at December 31, 2022 and December 31, 2021, respectively, which 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

The following table represent the activity in the ACL for loans for the year ended December 31, 2022, 2021 and 2020:

	Beginning		Provision for						Ending
	Balance		(Release of)						Balance
Allowance for credit losses	January 1, 2022		Credit Losses		Charge-offs		Recoveries		December 31, 2022
Commercial	$	11,751	$	273	$	151	$	95	$	11,968
Leases		3,480		(246)		371		2		2,865
Commercial real estate – investor		10,795		1,199		1,401		81		10,674
Commercial real estate – owner occupied		4,913		10,117		133		104		15,001
Construction		3,373		(1,827)		-		-		1,546
Residential real estate – investor		760		(22)		-		30		768
Residential real estate – owner occupied		2,832		(1,010)		2		226		2,046
Multifamily		3,675		(1,285)		-		63		2,453
HELOC		2,510		(844)		-		140		1,806
Other		192		395		402		168		353
Total	$	44,281	$	6,750	$	2,460	$	909	$	49,480

	Beginning		Impact of		Provision for						Ending
Allowance for credit losses	Balance		WSB Acquisition		(Release of)						Balance
	January 1, 2021		with PCD Loans		Credit Losses		Charge-offs		Recoveries		December 31, 2021
Commercial	$	2,812	$	7,161	$	2,389	$	963	$	352	$	11,751
Leases		3,888		-		(339)		69		-		3,480
Commercial real estate – investor		7,899		1,877		3,665		2,724		78		10,795
Commercial real estate – owner occupied		3,557		2,771		147		1,797		235		4,913
Construction		4,054		102		(783)		-		-		3,373
Residential real estate – investor		1,740		23		(1,294)		-		291		760
Residential real estate – owner occupied		2,714		136		(176)		-		158		2,832
Multifamily		3,625		-		233		183		-		3,675
HELOC		1,948		5		340		17		234		2,510
Other		1,618				(1,387)		180		141		192
Total	$	33,855	$	12,075	$	2,795	$	5,933	$	1,489	$	44,281

	Beginning			Impact of	Provision						Ending
	Balance			Adopting	for Loan						Balance
Allowance for loan and lease losses:	January 1, 2020			ASC 326	Losses		Charge-offs		Recoveries		December 31, 2020
Commercial	$	3,015		(292)	$	72	$	39	$	56	$	2,812
Leases		1,262		501		2,233		206		98		3,888
Commercial real estate – Investor		6,218		(741)		2,769		512		165		7,899
Commercial real estate – Owner occupied		3,678		(848)		1,793		1,763		697		3,557
Construction		513		1,334		2,095		60		172		4,054
Residential real estate – Investor		601		740		350		8		57		1,740
Residential real estate – Owner occupied		1,257		1,320		(107)		43		287		2,714
Multifamily		1,444		1,732		449		-		-		3,625
HELOC		1,161		1,526		(933)		193		387		1,948
Other		640		607		445		244		170		1,618
Total	$	19,789	$	5,879	$	9,166	$	3,068	$	2,089	$	33,855

Schedule of collateral dependent loans and related loan allowances.

			Accounts								ACL
December 31, 2022	Real Estate		Receivable		Equipment		Other		Total		Allocation
Commercial	$	883	$	5,915	$	-	$	364	$	7,162	$	569
Leases		-		-		1,248		-		1,248		1,248
Commercial real estate – investor		16,576		-		-		-		16,576		2,875
Commercial real estate – owner occupied		19,188		-		-		2,310		21,498		5,808
Residential real estate – investor		675		-		-		-		675		-
Residential real estate – owner occupied		1,817		-		-		-		1,817		244
Multifamily		1,322		-		-		-		1,322		-
HELOC		180		-		-		-		180		-
Total	$	40,641	$	5,915	$	1,248	$	2,674	$	50,478	$	10,744
			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		1,006		-		-		-		1,006		190
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
December 31, 2022	Past Due		Past Due		Due		Due		Current		Total Loans		Accruing
Commercial	$	3	$	1,012	$	825	$	1,840	$	839,124	$	840,964	$	460
Leases		447		22		614		1,083		276,302		277,385		-
Commercial real estate – investor		3,276		1,276		4,315		8,867		978,768		987,635		-
Commercial real estate – owner occupied		373		113		2,211		2,697		852,182		854,879		173
Construction		14		-		116		130		180,405		180,535		-
Residential real estate – investor		445		-		987		1,432		55,921		57,353		144
Residential real estate – owner occupied		1,191		-		2,232		3,423		216,295		219,718		485
Multifamily		267		361		1,322		1,950		321,741		323,691		-
HELOC		291		90		392		773		108,429		109,202		-
Other		19		-		-		19		18,228		18,247		-
Total	$	6,326	$	2,874	$	13,014	$	22,214	$	3,847,395	$	3,869,609	$	1,262

													90 days or
					90 Days or								Greater Past
	30-59 Days		60-89 Days		Greater Past		Total Past						Due and
December 31, 2021 1	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		798,554		799,928		-
Commercial real estate – owner occupied		2,324		500		4,848		7,672		724,173		731,845		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		398		614		125,676		126,290		-
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	December 31, 2022		With no ACL		December 31, 2021		With no ACL
Commercial	$	7,189	$	6,598	$	11,894	$	9,217
Leases		1,876		-		3,754		2,943
Commercial real estate – investor		4,346		4,244		5,694		5,694
Commercial real estate – owner occupied		8,050		3,813		11,637		11,205
Construction		251		-		160		160
Residential real estate – investor		1,528		675		876		876
Residential real estate – owner occupied		3,713		1,572		4,898		4,622
Multifamily		2,538		1,322		1,573		1,573
HELOC		2,109		180		1,042		852
Other		2		-		3		3
Total	$	31,602	$	18,404	$	41,531	$	37,145

Schedule of credit quality indicators by class of loans

Credit quality indicators by class of loans as of December 31, 2022 were as follows in the vintage table below:

	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted To Term Loans		Total
Commercial
Pass	$	225,056	$	70,608	$	21,597	$	12,742	$	6,957	$	2,651	$	447,821	$	-	$	787,432
Special Mention		1,875		272		1,182		2,432		-		-		21,286		-		27,047
Substandard		4,958		2,447		2,981		12,176		7		-		3,916		-		26,485
Total commercial		231,889		73,327		25,760		27,350		6,964		2,651		473,023		-		840,964
Leases
Pass		161,379		64,203	$	26,995		17,653		4,449		830		-		-		275,509
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		1,606		-		-		270		-		-		-		-		1,876
Total leases		162,985		64,203		26,995		17,923		4,449		830		-		-		277,385
Commercial real estate – investor
Pass		416,094		228,686		118,491		63,845		46,935		46,406		7,113		-		927,570
Special Mention		5,349		1,417		5,490		10,206		1,070		9,123		-		-		32,655
Substandard		12,332		2,018		-		10,763		-		2,297		-		-		27,410
Total commercial real estate – investor		433,775		232,121		123,981		84,814		48,005		57,826		7,113		-		987,635
Commercial real estate – owner occupied
Pass		169,703		223,731		105,669		47,351		49,367		86,660		33,745		-		716,226
Special Mention		8,430		22,242		48,184		17,668		231		1,008		-		-		97,763
Substandard		2,546		17,129		1,191		16,962		-		3,062		-		-		40,890
Total commercial real estate – owner occupied		180,679		263,102		155,044		81,981		49,598		90,730		33,745		-		854,879
Construction
Pass		53,058		65,758		39,542		2,390		226		1,408		1,523		-		163,905
Special Mention		-		-		15,297		-		-		-		-		-		15,297
Substandard		1,217		-		-		116		-		-		-		-		1,333
Total construction		54,275		65,758		54,839		2,506		226		1,408		1,523		-		180,535
Residential real estate – investor
Pass		14,737		9,910		6,945		8,585		4,853		9,548		991		-		55,569
Special Mention		-		70		-		-		-		-		-		-		70
Substandard		621		-		-		499		186		408		-		-		1,714
Total residential real estate – investor		15,358		9,980		6,945		9,084		5,039		9,956		991		-		57,353
Residential real estate – owner occupied
Pass		41,885		44,884		28,418		16,146		12,152		70,741		1,638		-		215,864
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		131		267		237		723		131		2,365		-		-		3,854
Total residential real estate – owner occupied		42,016		45,151		28,655		16,869		12,283		73,106		1,638		-		219,718
Multifamily
Pass		76,877		126,257		52,262		13,125		39,703		6,098		329		-		314,651
Special Mention		377		3,683		342		1,684		-		-		-		-		6,086
Substandard		2,100		-		-		-		587		267		-		-		2,954
Total multifamily		79,354		129,940		52,604		14,809		40,290		6,365		329		-		323,691
HELOC
Pass		2,760		517		1,497		1,703		657		2,288		97,258		-		106,680
Special Mention		-		-		-		-		-		-		111		-		111
Substandard		62		1		-		-		67		309		1,972		-		2,411
Total HELOC		2,822		518		1,497		1,703		724		2,597		99,341		-		109,202
Other
Pass		4,195		2,835		432		167		69		111		10,436		-		18,245
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		1		-		-		-		1		-		2
Total other		4,195		2,835		433		167		69		111		10,437		-		18,247
Total loans
Pass		1,165,744		837,389		401,848		183,707		165,368		226,741		600,854		-		3,581,651
Special Mention		16,031		27,684		70,495		31,990		1,301		10,131		21,397		-		179,029
Substandard		25,573		21,862		4,410		41,509		978		8,708		5,889		-		108,929
Total loans	$	1,207,348	$	886,935	$	476,753	$	257,206	$	167,647	$	245,580	$	628,140	$	-	$	3,869,609

Credit quality indicators by class of loans as of December 31, 2021 were as follows in the vintage table below:

	2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted To Term 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		245,346		175,218		118,697		85,049		64,810		55,523		18,602		-		763,245
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		263,050		177,596		129,698		85,230		68,422		57,330		18,602		-		799,928
Commercial real estate – owner occupied
Pass		290,225		155,353		90,325		60,915		54,236		59,887		2,522		-		713,463
Special Mention		-		-		2,953		-		-		-		-		-		2,953
Substandard		8,318		942		1,686		-		1,251		3,232		-		-		15,429
Total commercial real estate – owner occupied		298,543		156,295		94,964		60,915		55,487		63,119		2,522		-		731,845
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		12,315		104,843		-		124,759
Special Mention		-		-		-		-		-		-		108		-		108
Substandard		-		-		-		17		12		376		1,018		-		1,423
Total HELOC		907		2,091		2,131		822		1,679		12,691		105,969		-		126,290
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

Schedule of loans to principal officers, directors, and their affiliates, made in the ordinary course of business

	2022		2021
Beginning balance	$	10,162	$	783
New loans, including acquired related party loans		267		11,836
Repayments and other reductions		(1,946)		(2,457)
Change in related party status		-		-
Ending balance	$	8,483	$	10,162