XML 28 R13.htm IDEA: XBRL DOCUMENT v3.24.0.1
Loans, Allowance for Credit Losses, and Asset Quality Information
 12 Months Ended
Dec. 31, 2023
Receivables [Abstract]  
Loans, Allowance for Credit Losses, and Asset Quality Information Loans, Allowance for Credit Losses, and Asset Quality Information
The following is a summary of the major categories of total loans outstanding:
December 31, 2023December 31, 2022
($ in thousands)AmountPercentageAmountPercentage
Commercial and industrial$905,862 11 %641,941 9 %
Construction, development & other land loans992,980 12 %934,176 14 %
Commercial real estate - owner occupied1,259,022 16 %1,036,270 16 %
Commercial real estate - non owner occupied2,528,060 31 %2,123,811 32 %
Multi-family real estate421,376 5 %350,180 5 %
Residential 1-4 family real estate1,639,469 20 %1,195,785 18 %
Home equity loans/lines of credit335,068 4 %323,726 5 %
Consumer loans68,443 1 %60,659 1 %
Subtotal
8,150,280 100 %6,666,548 100 %
Unamortized net deferred loan fees(178)(1,403)
Total loans
$8,150,102 6,665,145 
Also included in the table above are SBA loans, generally originated under the SBA 7A loan program, with additional information on these loans presented in the table below.
($ in thousands)December 31,
2023		December 31,
2022
Guaranteed portions of SBA Loans included in table above$35,462 31,893 
Unguaranteed portions of SBA Loans included in table above107,784 116,910 
Total SBA loans included in the table above$143,246 148,803 
Sold portions of SBA loans with servicing retained - not included in table above$349,275 392,370 
At December 31, 2023 and December 31, 2022, there were remaining unaccreted discounts on the retained portion of sold SBA loans amounting to $3.5 million and $4.3 million respectively.
At December 31, 2023 and December 31, 2022, loans in the amount of $6.5 billion and $5.3 billion, respectively, were pledged as collateral for certain borrowings. Refer to Note 9 for further discussion.
At December 31, 2023 and 2022, total loans included loans to executive officers and directors of the Company, and their associates, totaling approximately $63.7 million and $6.0 million, respectively. There were nine new loans and advances on existing loans totaling approximately $58.5 million for the year ended December 31, 2023 and repayments amounted to $0.8 million for that period. Available credit on related party loans totaled $2.7 million and $1.2 million at December 31, 2023 and December 31, 2022, respectively.
As of December 31, 2023 and 2022, unamortized discounts on all acquired loans totaled $24.0 million and $11.6 million, respectively. Loan discounts are generally amortized as yield adjustments over the respective lives of the loans, while the loans perform.
Nonperforming assets ("NPAs") are defined as nonaccrual loans, FDMs, loans past due 90 or more days and still accruing interest, foreclosed real estate, and prior to the adoption of ASU 2022-02 on January 1, 2023, TDRs.
The following table summarizes the NPAs for each period presented:
($ in thousands)December 31,
2023		December 31,
2022
Nonperforming assets  
Nonaccrual loans$32,208 28,514 
Modifications to borrowers in financial distress11,719 — 
TDRs - accruing— 9,121 
Total nonperforming loans43,927 37,635 
Foreclosed properties862 658 
Total nonperforming assets$44,789 38,293 
At December 31, 2023 and 2022, the Company had $1.0 million and $0.8 million in residential mortgage loans in process of foreclosure, respectively.
At December 31, 2023 and December 31, 2022, there was one loan with an immaterial commitment to lend additional funds to borrowers whose loans were nonperforming.
The following table is a summary of the Company’s nonaccrual loans by major categories for the year ended December 31, 2023.
($ in thousands)Nonaccrual Loans with No AllowanceNonaccrual Loans with an AllowanceTotal Nonaccrual Loans
Commercial and industrial$944 8,932 9,876 
Construction, development & other land loans— 399 399 
Commercial real estate - owner occupied960 6,082 7,042 
Commercial real estate - non owner occupied6,121 1,082 7,203 
Residential 1-4 family real estate— 4,843 4,843 
Home equity loans/lines of credit534 2,169 2,703 
Consumer loans— 142 142 
Total$8,559 23,649 32,208 
The following table is a summary of the Company’s nonaccrual loans by major categories for the year ended December 31, 2022.
($ in thousands)Nonaccrual Loans with No AllowanceNonaccrual Loans with an AllowanceTotal Nonaccrual Loans
Commercial and industrial$3,855 6,374 10,229 
Construction, development & other land loans— 1,009 1,009 
Commercial real estate - owner occupied3,903 5,770 9,673 
Commercial real estate - non owner occupied1,107 1,725 2,832 
Residential 1-4 family real estate157 3,132 3,289 
Home equity loans/lines of credit— 1,397 1,397 
Consumer loans— 85 85 
Total$9,022 19,492 28,514 
There is no interest income recognized during the periods presented on nonaccrual loans. The Company follows its nonaccrual policy of reversing contractual interest income in the income statement when the Company places a loan on nonaccrual status.
The following table represents the accrued interest receivables written off by reversing interest income for the periods indicate.
($ in thousands)Year Ended December 31, 2023Year Ended December 31, 2022
Commercial and industrial$225 102 
Construction, development & other land loans10 16 
Commercial real estate - owner occupied124 124 
Commercial real estate - non owner occupied186 15 
Residential 1-4 family real estate38 45 
Home equity loans/lines of credit57 20 
Consumer loans2 2 
Total$642 324 

The following table presents an analysis of the payment status of the Company’s loans as of December 31, 2023.
($ in thousands)Accruing
30-59 Days
Past Due		Accruing 60-
89 Days
Past Due		Accruing 90
Days or More
Past Due		Nonaccrual
Loans		Accruing
Current		Total Loans
Receivable
Commercial and industrial$3,726 257 — 9,876 892,003 905,862 
Construction, development & other land loans241 256 — 399 992,084 992,980 
Commercial real estate - owner occupied906 404 — 7,042 1,250,670 1,259,022 
Commercial real estate - non owner occupied361 — — 7,203 2,520,496 2,528,060 
Multi-family real estate— — — — 421,376 421,376 
Residential 1-4 family real estate18,868 3,401 — 4,843 1,612,357 1,639,469 
Home equity loans/lines of credit603 349 — 2,703 331,413 335,068 
Consumer loans270 131 — 142 67,900 68,443 
Total$24,975 4,798 — 32,208 8,088,299 8,150,280 
Unamortized net deferred loan fees(178)
Total loans$8,150,102 
The following table presents an analysis of the payment status of the Company’s loans as of December 31, 2022.
($ in thousands)Accruing
30-59 Days
Past Due		Accruing 60-
89 Days
Past Due		Accruing 90
Days or More
Past Due		Nonaccrual
Loans		Accruing
Current		Total Loans
Receivable
Commercial and industrial$438 565 — 10,229 630,709 641,941 
Construction, development & other land loans238 1,687 — 1,009 931,242 934,176 
Commercial real estate - owner occupied124 48 — 9,673 1,026,425 1,036,270 
Commercial real estate - non owner occupied496 49 — 2,832 2,120,434 2,123,811 
Multi-family real estate— — — — 350,180 350,180 
Residential 1-4 family real estate3,415 25 — 3,289 1,189,056 1,195,785 
Home equity loans/lines of credit457 371 — 1,397 321,501 323,726 
Consumer loans249 66 — 85 60,259 60,659 
Total$5,417 2,811 — 28,514 6,629,806 6,666,548 
Unamortized net deferred loan (fees) costs(1,403)
Total loans$6,665,145 

Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. The Company reviews individually evaluated loans on nonaccrual with a net book balance of $500,000 or greater for designation as collateral dependent loans, as well as certain other loans that may still be accruing interest and/or are less than $500,000 in size that management of the Company designates as having higher risk. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the ACL.
The following table presents an analysis of collateral-dependent loans of the Company as of December 31, 2023.
($ in thousands)Residential PropertyBusiness AssetsLandCommercial PropertyTotal Collateral-Dependent Loans
Commercial and industrial$— 2,385 — — 2,385 
Commercial real estate - owner occupied— — — 1,142 1,142 
Commercial real estate - non owner occupied— — — 6,121 6,121 
Home equity loans/lines of credit534 — — — 534 
Total$534 2,385 — 7,263 10,182 

The following table presents an analysis of collateral-dependent loans of the Company as of December 31, 2022.
($ in thousands)Residential PropertyBusiness AssetsLandCommercial PropertyTotal Collateral-Dependent Loans
Commercial and industrial$— 6,394 — — 6,394 
Commercial real estate - owner occupied— — — 4,578 4,578 
Commercial real estate - non owner occupied— — — 2,145 2,145 
Residential 1-4 family real estate157 — — — 157 
Total$157 6,394 — 6,723 13,274 

Under CECL, for collateral dependent loans, the Company has adopted the practical expedient to measure the ACL based on the fair value of collateral. The ACL is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required.
The Company's policy is to obtain third-party appraisals on any significant pieces of collateral. For loans secured by real estate, the Company's policy is to write nonaccrual loans down to 90% of the appraised value, which considers estimated selling costs. For real estate collateral that is in industries that are undergoing heightened stress, the Company often discounts the collateral values by an additional 10% to 25% due to additional discounts that are estimated to be incurred in a near-term sale. For non-real estate collateral secured loans, the Company generally writes nonaccrual loans down to 75% of the appraised value, which provides for selling costs and liquidity discounts that are usually incurred when disposing of non-real estate collateral. For reviewed loans that are not on nonaccrual basis, the Company assigns a specific allowance based on the parameters noted above. There is no significant over-coverage of collateral for any of the loan types noted above.
Fluctuations in the ACL each period are based on loan mix and growth, changes in the levels of nonperforming loans, economic forecasts impacting loss drivers, other assumptions and inputs to the CECL model, and as occurred in 2023, adjustments for acquired loan portfolios. Much of the change to the level of ACL during the year ended December 31, 2023 is attributed to the acquisition of GrandSouth. In addition to the initial allowance recorded for PCD loans of $5.6 million, the Company recorded an initial provision of $12.2 million related to the non-PCD loans in the GrandSouth portfolio. The balance of the change was a result of loan growth during the year and updated prepayment speed estimates in the CECL model, which have slowed with market rate increases, thus requiring additional allowance for the estimated longer life of loans.
The following tables presents the activity in the ACL on loans for each of the periods indicated.
($ in thousands)Beginning balanceInitial ACL for acquired PCD loansCharge-offsRecoveriesProvisions/(Reversals)Ending balance
As of and for the year ended December 31, 2023
Commercial and industrial$17,718 5,197 (8,358)1,393 5,277 21,227 
Construction, development & other land loans15,128 49 (120)370 (1,487)13,940 
Commercial real estate - owner occupied14,972 191 (144)465 2,734 18,218 
Commercial real estate - non owner occupied22,780 51 (235)737 1,583 24,916 
Multi-family real estate2,957 — — 13 855 3,825 
Residential 1-4 family real estate11,354 113 (4)377 9,556 21,396 
Home equity loans/lines of credit3,158 8 (309)98 384 3,339 
Consumer loans2,900 1 (1,005)248 848 2,992 
$90,967 5,610 (10,175)3,701 19,750 109,853 

($ in thousands)Beginning balanceCharge-offsRecoveriesProvisions/(Reversals)Ending balance
As of and for the year ended December 31, 2022
Commercial and industrial$16,249 (2,519)756 3,232 17,718 
Construction, development & other land loans16,519 — 480 (1,871)15,128 
Commercial real estate - owner occupied12,317 (214)691 2,178 14,972 
Commercial real estate - non owner occupied16,789 (849)1,281 5,559 22,780 
Multi-family real estate1,236 — 11 1,710 2,957 
Residential 1-4 family real estate8,686 — 17 2,651 11,354 
Home equity loans/lines of credit4,337 (43)600 (1,736)3,158 
Consumer loans2,656 (840)207 877 2,900 
$78,789 (4,465)4,043 12,600 90,967 
($ in thousands)Beginning balanceInitial ACL for acquired PCD loansAdjustment for implementation of CECLCharge-offsRecoveriesProvisions/(Reversals)Ending balance
As of and for the year ended December 31, 2021
Commercial and industrial$11,316 2,917 3,067 (3,722)1,744 927 16,249 
Construction, development & other land loans5,355 165 6,140 (245)948 4,156 16,519 
Commercial real estate - owner occupied10,608 307 (189)(362)150 1,803 12,317 
Commercial real estate - non owner occupied11,465 1,181 380 (1,933)371 5,325 16,789 
Multi-family real estate1,530 1 (448)— 12 141 1,236 
Residential 1-4 family real estate8,048 222 2,584 (273)761 (2,656)8,686 
Home equity loans/lines of credit2,375 92 2,580 (400)578 (888)4,337 
Consumer loans1,478 10 674 (667)358 803 2,656 
Unallocated213 — (213)— — — — 
$52,388 4,895 14,575 (7,602)4,922 9,611 78,789 

Credit Quality Indicators
The Company tracks credit quality based on its internal risk ratings. Upon origination, a loan is assigned an initial risk grade, which is generally based on several factors such as the borrower’s credit score, the loan-to-value ratio, the debt-to-income ratio, etc. Loans that are risk-graded as substandard during the origination process are declined. After loans are initially graded, they are monitored regularly for credit quality based on many factors, such as payment history, the borrower’s financial status, and changes in collateral value. Loans can be downgraded or upgraded depending on management’s evaluation of these factors. Internal risk-grading policies are consistent throughout each loan type.
The following describes the Company’s internal risk grades in ascending order of likelihood of loss:
Risk GradeDescription
Pass:
1Loans with virtually no risk, including cash secured loans.
2Loans with documented significant overall financial strength.  These loans have minimum chance of loss due to the presence of multiple sources of repayment – each clearly sufficient to satisfy the obligation.
3Loans with documented satisfactory overall financial strength.  These loans have a low loss potential due to presence of at least two clearly identified sources of repayment – each of which is sufficient to satisfy the obligation under the present circumstances.
4Loans to borrowers with acceptable financial condition.  These loans could have signs of minor operational weaknesses, lack of adequate financial information, or loans supported by collateral with questionable value or marketability.  
5Loans that represent above average risk due to minor weaknesses and warrant closer scrutiny by management.  Collateral is generally available and felt to provide reasonable coverage with realizable liquidation values in normal circumstances.  Repayment performance is satisfactory.
P
(Pass)		Consumer loans that are of satisfactory credit quality with borrowers who exhibit good personal credit history, average personal financial strength and moderate debt levels.  These loans generally conform to Bank policy, but may include approved mitigated exceptions to the guidelines.  
Special Mention: 
6Existing loans with defined weaknesses in primary source of repayment that, if not corrected, could cause a loss to the Company.
Classified: 
7An existing loan inadequately protected by the current sound net worth and paying capacity of the obligor or the collateral pledged, if any.  These loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.
8Loans that have a well-defined weakness that make the collection or liquidation in full highly questionable and improbable.  Loss appears imminent, but the exact amount and timing is uncertain.
9Loans that are considered uncollectible and are in the process of being charged-off.  This grade is a temporary grade assigned for administrative purposes until the charge-off is completed.
F
(Fail)		Consumer loans with a well-defined weakness, such as exceptions of any kind with no mitigating factors, history of paying outside the terms of the note, insufficient income to support the current level of debt, etc.

The tables below present the Company’s recorded investment in loans by credit quality indicators by year of origination or renewal as of the periods indicated. Acquired loans are presented in the year originated, not in the year of acquisition.
In the tables that follow, substantially all of the "Classified" loans have grades of 7 or Fail, with those categories having similar levels of risk.
Revolving lines of credit that converted to term loans during the years ended December 31, 2023 and December 31, 2022 totaled $25.9 million and $7.9 million, respectively.
As presented in the tables that follow, as of December 31, 2023, the Company had $44.1 million in loans graded as Special Mention and $54.2 million in loans graded as Classified, which includes all nonaccrual loans at that date. As of December 31, 2022, the Company had $39.0 million in loans graded as Special Mention and $48.5 million in loans graded as Classified, which includes all nonaccrual loans at that date.
Term Loans by Year of Origination
($ in thousands)20232022202120202019PriorRevolvingTotal
As of December 31, 2023
Commercial and industrial
Pass$136,735 161,131 111,069 75,312 38,495 60,626 302,684 886,052 
Special Mention2,832 2,547 167 185 448 672 1,135 7,986 
Classified1,626 1,152 720 1,389 1,647 4,487 803 11,824 
Total commercial and industrial141,193 164,830 111,956 76,886 40,590 65,785 304,622 905,862 
Gross charge-offs, YTD171 1,036 713 537 821 1,547 3,533 8,358 
Construction, development & other land loans
Pass563,998 231,450 90,374 16,662 11,598 5,816 70,852 990,750 
Special Mention489 273 59 — 2 4 19 846 
Classified657 708 — — 8 11 — 1,384 
Total construction, development & other land loans565,144 232,431 90,433 16,662 11,608 5,831 70,871 992,980 
Gross charge-offs, YTD— — — — — 120 — 120 
Commercial real estate - owner occupied
Pass210,449 323,852 299,135 196,343 92,452 86,784 23,198 1,232,213 
Special Mention338 2,533 271 817 5,755 2,253 — 11,967 
Classified4,456 1,505 1,721 895 2,288 3,904 73 14,842 
Total commercial real estate - owner occupied215,243 327,890 301,127 198,055 100,495 92,941 23,271 1,259,022 
Gross charge-offs, YTD— — 49 — — 92 3 144 
Commercial real estate - non owner occupied
Pass509,596 748,854 722,472 287,235 119,515 84,690 29,001 2,501,363 
Special Mention11,353 199 36 393 1,183 5,942 342 19,448 
Classified871 32 14 4,214 634 1,484 — 7,249 
Total commercial real estate - non owner occupied521,820 749,085 722,522 291,842 121,332 92,116 29,343 2,528,060 
Gross charge-offs, YTD— — 235 — — — — 235 
Multi-family real estate
Pass57,378 137,533 139,879 43,881 12,231 10,323 20,151 421,376 
Special Mention— — — — — — — — 
Classified— — — — — — — — 
Total multi-family real estate57,378 137,533 139,879 43,881 12,231 10,323 20,151 421,376 
Gross charge-offs, YTD— — — — — — — — 
Residential 1-4 family real estate
Pass363,410 400,483 317,515 186,459 94,567 260,102 3,247 1,625,783 
Special Mention681 41 202 64 587 1,987 — 3,562 
Classified1,848 50 474 741 472 6,539 — 10,124 
Total residential 1-4 family real estate365,939 400,574 318,191 187,264 95,626 268,628 3,247 1,639,469 
Gross charge-offs, YTD— — — — — 4 — 4 
Home equity loans/lines of credit
Pass2,830 1,136 1,141 223 499 1,233 319,199 326,261 
Special Mention163 — 122 — — — 18 303 
Classified255 — 146 91 112 10 7,890 8,504 
Total home equity loans/lines of credit3,248 1,136 1,409 314 611 1,243 327,107 335,068 
Gross charge-offs, YTD— — — — — — 309 309 
Consumer loans
Pass16,497 12,906 4,999 2,173 432 429 30,757 68,193 
Special Mention— — — — — — — — 
Classified130 7 45 — 3 34 31 250 
Total consumer loans16,627 12,913 5,044 2,173 435 463 30,788 68,443 
Gross charge-offs, YTD34 79 73 23 — 1 795 1,005 
Total loans$1,886,592 2,026,392 1,690,561 817,077 382,928 537,330 809,400 8,150,280 
Unamortized net deferred loan fees(178)
Total loans, net of deferred loan fees$8,150,102 
Total gross charge-offs, year to date
$205 1,115 1,070 560 821 1,764 4,640 10,175 
Term Loans by Year of Origination
($ in thousands)20222021202020192018PriorRevolvingTotal
As of December 31, 2022
Commercial and industrial
Pass$185,167 107,747 85,110 51,274 590 76,588 120,590 627,066 
Special Mention342 166 648 1,312 — 990 332 3,790 
Classified734 1,909 808 1,384 — 5,762 488 11,085 
Total commercial and industrial186,243 109,822 86,566 53,970 590 83,340 121,410 641,941 
Construction, development & other land loans
Pass550,752 267,096 42,421 30,973 — 12,722 19,519 923,483 
Special Mention5,128 5 3,679 — — 100 13 8,925 
Classified656 107 38 899 — 44 24 1,768 
Total construction, development & other land loans556,536 267,208 46,138 31,872 — 12,866 19,556 934,176 
Commercial real estate - owner occupied
Pass258,025 305,324 190,464 96,495 179 141,053 15,499 1,007,039 
Special Mention1,170 1,070 4,042 6,926 — 3,277 665 17,150 
Classified3,060 208 84 1,572 — 6,790 367 12,081 
Total commercial real estate - owner occupied262,255 306,602 194,590 104,993 179 151,120 16,531 1,036,270 
Commercial real estate - non owner occupied
Pass718,696 747,653 319,708 141,284 — 168,096 21,159 2,116,596 
Special Mention545 44 394 1,363 — 1,180 — 3,526 
Classified420 1,057 — 884 — 1,328 — 3,689 
Total commercial real estate - non owner occupied719,661 748,754 320,102 143,531 — 170,604 21,159 2,123,811 
Multi-family real estate
Pass119,922 133,701 59,452 9,669 — 15,212 12,224 350,180 
Special Mention— — — — — — — — 
Classified— — — — — — — — 
Total multi-family real estate119,922 133,701 59,452 9,669 — 15,212 12,224 350,180 
Residential 1-4 family real estate
Pass317,282 274,756 186,102 98,559 185 301,885 1,379 1,180,148 
Special Mention1,189 127 110 470 — 2,416 — 4,312 
Classified763 251 221 359 — 9,072 659 11,325 
Total residential 1-4 family real estate319,234 275,134 186,433 99,388 185 313,373 2,038 1,195,785 
Home equity loans/lines of credit
Pass869 1,091 349 237 — 2,020 309,786 314,352 
Special Mention175 — — — — 18 1,072 1,265 
Classified106 156 94 87 — 213 7,453 8,109 
Total home equity loans/lines of credit1,150 1,247 443 324 — 2,251 318,311 323,726 
Consumer loans
Pass35,406 7,946 3,610 1,056 3 1,250 10,953 60,224 
Special Mention— — — — — — — — 
Classified320 31 3 1 — 25 55 435 
Total consumer loans35,726 7,977 3,613 1,057 3 1,275 11,008 60,659 
Total loans$2,200,727 1,850,445 897,337 444,804 957 750,041 522,237 6,666,548 
Unamortized net deferred loan fees(1,403)
Total loans, net of deferred loan fees$6,665,145 
Loan Modifications to Borrowers Experiencing Financial Difficulty
Effective January 1, 2023, we adopted ASU 2022-02 which eliminated the accounting guidance for TDRs and requires disclosures for certain loan modifications when a borrower is experiencing financial difficulty.
Occasionally, the Company modifies loans to borrowers in financial distress as a part of our loss mitigation activities. Various types of modification may be offered including principal forgiveness, term extension, payment delays, or interest rate reductions. In some cases, the Company will modify a certain loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession may be granted. For loans included in the “combination” columns below, multiple types of modifications have been made on the same loan within the current reporting period.
The followings tables present the amortized cost basis at December 31, 2023 of the loans modified during the twelve months then ended for borrowers experiencing financial difficulty, by loan category and type of concession granted.
Payment DelayTerm ExtensionCombination - Interest Rate Reduction and Term ExtensionTotalPercent of Total Class of Loans
Commercial and industrial$2,590 251 — 2,841 0.31 %
Construction, development & other land loans— 354 8 362 0.04 %
Commercial real estate - owner occupied210 4,245 — 4,455 0.35 %
Commercial real estate - non owner occupied— 206 — 206 0.01 %
Residential 1-4 family real estate— 735 — 735 0.04 %
Home equity loans/lines of credit557 2,436 121 3,114 0.93 %
Consumer loans— 6 — 6 0.01 %
Total$3,357 8,233 129 11,719 0.14 %
For the twelve months ended December 31, 2023, there were no modifications for borrowers experiencing financial difficulty with principal forgiveness concessions.
The following tables describes the financial effect for the twelve months ended December 31, 2023 of the modifications made for borrowers experiencing financial difficulty:
Weighted Average Interest Rate ReductionWeighted Average Payment Delay (in months)Weighted Average Term Extension (in months)
Commercial and industrial— %431
Construction, development & other land loans1.55 %019
Commercial real estate - owner occupied— %1134
Commercial real estate - non owner occupied— %013
Residential 1-4 family real estate— %023
Home equity loans/lines of credit2.40 %1349
Consumer loans— %024
The Company closely monitors the performance of the loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of loans that have been modified in the last twelve months as of December 31, 2023:
Payment Status (Amortized Cost Basis)
Current30-59 Days Past Due60-89 Days Past Due90+ Days Past Due
Commercial and industrial$2,841 — — — 
Construction, development & other land loans362 — — — 
Commercial real estate - owner occupied4,455 — — — 
Commercial real estate - non owner occupied206 — — — 
Residential 1-4 family real estate656 79 — — 
Home equity loans/lines of credit3,114 — — — 
Consumer loans6 — — — 
Total$11,640 79 — — 
None of the modifications made for borrowers experiencing financial difficulty during the twelve months ended December 31, 2023 are considered to have had a payment default.
Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the ACL is adjusted by the same amount.
TDR Disclosures Prior to the Adoption of ASU 2022-02
The restructuring of a loan was considered a TDR if both (i) the borrower was experiencing financial difficulties and (ii) the creditor had granted a concession. Concessions may have included interest rate reductions or below market interest rates, principal forgiveness, extension of terms and other actions intended to minimize potential losses.
The vast majority of the Company’s TDRs modified during the years ended December 31, 2022 and 2021 related to interest rate reductions combined with extension of terms. The Company does not generally grant principal forgiveness.
The Company’s TDRs can be classified as either nonaccrual or accruing based on the loan’s payment status. The TDRs that are nonaccrual are reported within the nonaccrual loan totals presented previously.
The following tables present information related to loans modified in a TDR during periods as indicated.
For the year ended December 31, 2022
($ in thousands, except number of contracts)Number of
Contracts		Pre-
Modification
Restructured
Balances		Post-
Modification
Restructured
Balances
TDRs – Accruing   
Commercial and industrial2 $143 143 
Construction, development & other land loans1 67 67 
Residential 1-4 family real estate2 75 78 
TDRs – Nonaccrual
Commercial and industrial5 744 744 
Commercial real estate - non owner occupied1 72 72 
Residential 1-4 family real estate1 36 36 
Total TDRs arising during period12 $1,137 1,140 
For the year ended December 31, 2021
($ in thousands, except number of contracts)Number of
Contracts		Pre-
Modification
Restructured
Balances		Post-
Modification
Restructured
Balances
TDRs – Accruing
   
Residential 1-4 family real estate1 $33 33 
TDRs – Nonaccrual
Commercial and industrial5 1,438 1,435 
Construction, development & other land loans1 75 75 
Commercial real estate - owner occupied3 553 553 
Commercial real estate - non owner occupied1 1,176 1,176 
Residential 1-4 family real estate1 263 263 
Total TDRs arising during period12 $3,538 3,535 
The Company considered a TDR loan to have defaulted when it became 90 or more days delinquent under the modified terms, had been transferred to nonaccrual status, or had been transferred to foreclosed real estate. There were no accruing TDRs that were modified in the twelve months preceding December 31, 2022 and 2021 and that defaulted during the twelve months ended December 31, 2022 and 2021.
Concentration of Credit Risk
The Company’s loan portfolio is not concentrated in loans to any single borrower or to a relatively small number of borrowers. Additionally, management is not aware of any concentrations of loans to classes of borrowers or industries that would be similarly affected by economic conditions. Approximately 88% of the Company's loan portfolio is secured by real estate and is therefore susceptible to changes in real estate valuations.
Most of our business activity is with customers located within the markets where we have banking operations. While our exposure to credit risk is affected by changes in the economy within our markets, the risk is not significantly concentrated. The following table presents the total lending exposure for the counties with the largest percentage of our loan portfolio as of December 31, 2023 and 2022. No other market (as defined by county) had total loans outstanding in excess of 5% of the total portfolio at year end.
Percentage of Loans Outstanding
20232022
Wake County, North Carolina10.1 %11.6 %
New Hanover County, North Carolina8.1 %9.1 %
Mecklenburg County, North Carolina7.6 %7.9 %
Buncombe County, North Carolina5.3 %6.1 %
Guilford County, North Carolina5.0 %5.0 %
In addition to monitoring potential concentrations of loans to particular borrowers or groups of borrowers, industries, and geographic regions, the Company monitors exposure to credit risk that could arise from potential concentrations of lending products and practices The Company has determined that there is no concentration of credit risk associated with its lending policies or practices.
Allowance for Unfunded Loan Commitments

In addition to the ACL on loans, the Company maintains an allowance for lending-related commitments such as unfunded loan commitments and letters of credit. The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for lending-related commitments on off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding study derived from internal information, and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the ACL on loans, and are discussed in Note 1. The allowance for unfunded loan commitments of $11.4 million and $13.3 million at December 31, 2023 and December 31, 2022, respectively, were included in "Other liabilities" on the consolidated balance sheets.

The following table presents the balance and activity in the allowance for unfunded loan commitments for twelve months ended December 31, 2023 and December 31, 2022:
($ in thousands)December 31, 2023December 31, 2022
Beginning balance$13,306 $13,506 
Initial provision for credit losses on unfunded commitments acquired from GrandSouth1,921 — 
Charge-offs— — 
Recoveries— — 
Reversal of provision for unfunded commitments(3,858)(200)
Ending balance $11,369 $13,306 

Allowance for Credit Losses - Securities Held Maturity
The ACL for securities held to maturity was insignificant at December 31, 2023 and December 31, 2022.