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Note 3 - Loans and Allowance for Credit Losses on Loans

9 Months Ended

Sep. 30, 2024

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

(3)

Loans and Allowance for Credit Losses on Loans

Composition of loans by class follows:

(in thousands)	September 30, 2024		December 31, 2023

Commercial real estate - non-owner occupied	$	1,686,448	$	1,561,689
Commercial real estate - owner occupied		949,538		907,424
Total commercial real estate		2,635,986		2,469,113

Commercial and industrial - term		865,384		867,380
Commercial and industrial - lines of credit		513,909		439,748
Total commercial and industrial		1,379,293		1,307,128

Residential real estate - owner occupied		783,337		708,893
Residential real estate - non-owner occupied		381,051		358,715
Total residential real estate		1,164,388		1,067,608

Construction and land development		674,918		531,324
Home equity lines of credit		236,819		211,390
Consumer		143,684		145,340
Leases		16,760		15,503
Credits cards		26,285		23,632
Total loans (1)	$	6,278,133	$	5,771,038

(1) Total loans are presented inclusive of premiums, discounts and net loan origination fees and costs.

Accrued interest receivable on loans, which is excluded from the amortized cost of loans, totaled $22 million and $21 million at September 30, 2024 and December 31, 2023, respectively, and was included in the condensed consolidated balance sheets.

Loans with carrying amounts of $3.32 billion and $3.15 billion were pledged to secure FHLB borrowing capacity at September 30, 2024 and December 31, 2023, respectively.

Loans to directors and their related interests, including loans to companies for which directors are principal owners and executive officers, totaled $74 million and $62 million as of September 30, 2024 and December 31, 2023, respectively.

ACL for Loans

The tables below reflects activity in the ACL for loans:

(in thousands) Three Months Ended September 30, 2024	Beginning Balance		Provision for Credit Losses on Loans			Charge-offs			Recoveries		Ending Balance

Commercial real estate - non-owner occupied	$	13,032	$	278		$	-		$	18	$	13,328
Commercial real estate - owner occupied		9,719		(352	)		-			-		9,367
Total commercial real estate		22,751		(74	)		-			18		22,695

Commercial and industrial - term		21,629		201			(658	)		67		21,239
Commercial and industrial - lines of credit		5,825		677			-			-		6,502
Total commercial and industrial		27,454		878			(658	)		67		27,741

Residential real estate - owner occupied		13,325		1,011			(395	)		4		13,945
Residential real estate - non-owner occupied		4,248		685			-			7		4,940
Total residential real estate		17,573		1,696			(395	)		11		18,885

Construction and land development		10,029		1,622			-			-		11,651
Home equity lines of credit		1,147		87			-			-		1,234
Consumer		2,552		(6	)		(193	)		107		2,460
Leases		411		(9	)		-			-		402
Credit cards		238		131			(99	)		5		275
Total	$	82,155	$	4,325		$	(1,345	)	$	208	$	85,343

(in thousands) Nine Months Ended September 30, 2024	Beginning Balance		Provision for Credit Losses on Loans			Charge-offs			Recoveries		Ending Balance

Commercial real estate - non-owner occupied	$	22,133	$	(8,856	)	$	-		$	51	$	13,328
Commercial real estate - owner occupied		11,667		(2,349	)		-			49		9,367
Total commercial real estate		33,800		(11,205	)		-			100		22,695

Commercial and industrial - term		14,359		7,006			(748	)		622		21,239
Commercial and industrial - lines of credit		6,495		(197	)		-			204		6,502
Total commercial and industrial		20,854		6,809			(748	)		826		27,741

Residential real estate - owner occupied		9,316		5,021			(416	)		24		13,945
Residential real estate - non-owner occupied		4,282		651			-			7		4,940
Total residential real estate		13,598		5,672			(416	)		31		18,885

Construction and land development		7,593		4,058			-			-		11,651
Home equity lines of credit		1,660		(428	)		-			2		1,234
Consumer		1,407		1,294			(606	)		365		2,460
Leases		220		182			-			-		402
Credit cards		242		193			(184	)		24		275
Total	$	79,374	$	6,575		$	(1,954	)	$	1,348	$	85,343

(in thousands) Three Months Ended September 30, 2023	Beginning Balance		Provision for Credit Losses on Loans			Charge-offs			Recoveries		Ending Balance

Commercial real estate - non-owner occupied	$	21,773	$	(420	)	$	-		$	17	$	21,370
Commercial real estate - owner occupied		11,557		1,088			-			6		12,651
Total commercial real estate		33,330		668			-			23		34,021

Commercial and industrial - term		14,792		1,026			(1,878	)		16		13,956
Commercial and industrial - lines of credit		6,503		(158	)		-			1		6,346
Total commercial and industrial		21,295		868			(1,878	)		17		20,302

Residential real estate - owner occupied		8,835		278			-			6		9,119
Residential real estate - non-owner occupied		4,169		55			-			-		4,224
Total residential real estate		13,004		333			-			6		13,343

Construction and land development		6,752		227			-			-		6,979
Home equity lines of credit		1,609		(7	)		-			-		1,602
Consumer		1,285		184			(232	)		131		1,368
Leases		205		7			-			-		212
Credit cards		230		20			(5	)		3		248
Total	$	77,710	$	2,300		$	(2,115	)	$	180	$	78,075

(in thousands) Nine Months Ended September 30, 2023	Beginning Balance		Provision for Credit Losses on Loans			Charge-offs			Recoveries		Ending Balance

Commercial real estate - non-owner occupied	$	22,641	$	(1,324	)	$	-		$	53	$	21,370
Commercial real estate - owner occupied		10,827		1,818			-			6		12,651
Total commercial real estate		33,468		494			-			59		34,021

Commercial and industrial - term		12,991		2,955			(2,006	)		16		13,956
Commercial and industrial - lines of credit		6,389		(193	)		-			150		6,346
Total commercial and industrial		19,380		2,762			(2,006	)		166		20,302

Residential real estate - owner occupied		6,717		2,418			(43	)		27		9,119
Residential real estate - non-owner occupied		3,597		625			-			2		4,224
Total residential real estate		10,314		3,043			(43	)		29		13,343

Construction and land development		7,186		(207	)		-			-		6,979
Home equity lines of credit		1,613		1			(12	)		-		1,602
Consumer		1,158		473			(639	)		376		1,368
Leases		201		11			-			-		212
Credit cards		211		123			(105	)		19		248
Total	$	73,531	$	6,700		$	(2,805	)	$	649	$	78,075

The following tables present the amortized cost basis of non-performing loans and the amortized cost basis of loans on non-accrual status for which there was no related ACL losses:

	Non-accrual Loans				Past Due 90-Days-
(in thousands)	With No		Total		or-More and Still
September 30, 2024	Recorded ACL		Non-accrual		Accruing Interest

Commercial real estate - non-owner occupied	$	304	$	1,055	$	—
Commercial real estate - owner occupied		688		1,499		90
Total commercial real estate		992		2,554		90

Commercial and industrial - term		4,174		6,260		548
Commercial and industrial - lines of credit		—		—		—
Total commercial and industrial		4,174		6,260		548

Residential real estate - owner occupied		498		6,514		—
Residential real estate - non-owner occupied		—		540		128
Total residential real estate		498		7,054		128

Construction and land development		—		—		—
Home equity lines of credit		—		90		—
Consumer		—		330		5
Leases		—		—		—
Credit cards		—		—		99
Total	$	5,664	$	16,288	$	870

	Non-accrual Loans				Past Due 90-Days-
(in thousands)	With No		Total		or-More and Still
December 31, 2023	Recorded ACL		Non-accrual		Accruing Interest

Commercial real estate - non-owner occupied	$	1,714	$	8,649	$	—
Commercial real estate - owner occupied		—		885		—
Total commercial real estate		1,714		9,534		—

Commercial and industrial - term		688		4,456		—
Commercial and industrial - lines of credit		—		215		—
Total commercial and industrial		688		4,671		—

Residential real estate - owner occupied		230		3,667		—
Residential real estate - non-owner occupied		—		372		—
Total residential real estate		230		4,039		—

Construction and land development		—		—		—
Home equity lines of credit		343		467		—
Consumer		—		337		—
Leases		—		—		—
Credit cards		—		10		110
Total	$	2,975	$	19,058	$	110

For the three and nine month periods ended September 30, 2024 and 2023, the amount of accrued interest income previously recorded as revenue and subsequently reversed due to the change in accrual status was immaterial.

For the three and nine month periods ended September 30, 2024 and 2023, no interest income was recognized on loans on non-accrual status.

The following table presents the amortized cost basis and ACL allocated for collateral dependent loans, which are individually evaluated to determine expected credit losses:

(in thousands) September 30, 2024	Real Estate		Accounts Receivable / Equipment		Other		Total		ACL Allocation

Commercial real estate - non-owner occupied	$	7,607	$	-	$	-	$	7,607	$	1,007
Commercial real estate - owner occupied		2,055		-		-		2,055		308
Total commercial real estate		9,662		-		-		9,662		1,315

Commercial and industrial - term		1,425		4,815		-		6,240		810
Commercial and industrial - lines of credit		2,151		200		-		2,351		605
Total commercial and industrial		3,576		5,015		-		8,591		1,415

Residential real estate - owner occupied		5,997		-		-		5,997		198
Residential real estate - non-owner occupied		1,082		-		-		1,082		596
Total residential real estate		7,079		-		-		7,079		794

Construction and land development		-		-		-		-		-
Home equity lines of credit		90		-		-		90		-
Consumer		-		-		328		328		10
Leases		-		-		-		-		-
Credit cards		-		-		-		-		-
Total collateral dependent loans	$	20,407	$	5,015	$	328	$	25,750	$	3,534

(in thousands) December 31, 2023	Real Estate		Accounts Receivable / Equipment		Other		Total		ACL Allocation

Commercial real estate - non-owner occupied	$	15,419	$	-	$	-	$	15,419	$	1,604
Commercial real estate - owner occupied		2,586		-		-		2,586		812
Total commercial real estate		18,005		-		-		18,005		2,416

Commercial and industrial - term		302		4,088		-		4,390		377
Commercial and industrial - lines of credit		2,781		101		-		2,882		708
Total commercial and industrial		3,083		4,189		-		7,272		1,085

Residential real estate - owner occupied		4,205		-		-		4,205		198
Residential real estate - non-owner occupied		558		-		-		558		116
Total residential real estate		4,763		-		-		4,763		314

Construction and land development		-		-		-		-		-
Home equity lines of credit		467		-		-		467		-
Consumer		-		-		335		335		18
Leases		-		-		-		-		-
Credit cards		-		-		-		-		-
Total collateral dependent loans	$	26,318	$	4,189	$	335	$	30,842	$	3,833

The following tables present the aging of contractually past due loans by portfolio class:

(in thousands)			30-59 days		60-89 days		90 or more		Total Past		Total
September 30, 2024	Current		Past Due		Past Due		days Past Due		Due Loans		Loans

Commercial real estate - non-owner occupied	$	1,681,673	$	3	$	4,236	$	536	$	4,775	$	1,686,448
Commercial real estate - owner occupied		947,516		1,116		62		844		2,022		949,538
Total commercial real estate		2,629,189		1,119		4,298		1,380		6,797		2,635,986

Commercial and industrial - term		861,691		235		—		3,458		3,693		865,384
Commercial and industrial - lines of credit		513,589		—		320		—		320		513,909
Total commercial and industrial		1,375,280		235		320		3,458		4,013		1,379,293

Residential real estate - owner occupied		769,158		7,013		3,721		3,445		14,179		783,337
Residential real estate - non-owner occupied		379,813		—		648		590		1,238		381,051
Total residential real estate		1,148,971		7,013		4,369		4,035		15,417		1,164,388

Construction and land development		674,838		80		—		—		80		674,918
Home equity lines of credit		236,664		130		—		25		155		236,819
Consumer		142,722		450		214		298		962		143,684
Leases		16,760		—		—		—		—		16,760
Credit cards		25,908		208		70		99		377		26,285
Total	$	6,250,332	$	9,235	$	9,271	$	9,295	$	27,801	$	6,278,133

(in thousands)			30-59 days		60-89 days		90 or more		Total Past		Total
December 31, 2023	Current		Past Due		Past Due		days Past Due		Due Loans		Loans

Commercial real estate - non-owner occupied	$	1,558,756	$	768	$	318	$	1,847	$	2,933	$	1,561,689
Commercial real estate - owner occupied		906,385		758		260		21		1,039		907,424
Total commercial real estate		2,465,141		1,526		578		1,868		3,972		2,469,113

Commercial and industrial - term		866,089		244		2		1,045		1,291		867,380
Commercial and industrial - lines of credit		439,671		77		—		—		77		439,748
Total commercial and industrial		1,305,760		321		2		1,045		1,368		1,307,128

Residential real estate - owner occupied		699,475		5,290		1,612		2,516		9,418		708,893
Residential real estate - non-owner occupied		357,763		621		94		237		952		358,715
Total residential real estate		1,057,238		5,911		1,706		2,753		10,370		1,067,608

Construction and land development		531,324		—		—		—		—		531,324
Home equity lines of credit		210,823		67		33		467		567		211,390
Consumer		144,640		258		145		297		700		145,340
Leases		15,503		—		—		—		—		15,503
Credit cards		23,287		191		44		110		345		23,632
Total	$	5,753,716	$	8,274	$	2,508	$	6,540	$	17,322	$	5,771,038

Loan Risk Ratings

Consistent with regulatory guidance, Bancorp categorizes loans into credit risk rating categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information and current economic trends. Pass-rated loans include all risk-rated loans other than those classified as OAEM, substandard, and doubtful, which are defined below:

OAEM – Loans classified as OAEM have potential weaknesses requiring management's heightened attention. These potential weaknesses may result in deterioration of repayment prospects for the loan or of Bancorp's credit position at some future date.

Substandard – Loans classified as substandard are inadequately protected by the paying capacity of the obligor or of collateral pledged, if any. Loans so classified have well-defined weaknesses that jeopardize ultimate repayment of the debt. Default is a distinct possibility if the deficiencies are not corrected.

Substandard non-performing – Loans classified as substandard non-performing have all the characteristics of substandard loans and have been placed on non-accrual status. Loans are usually placed on non-accrual status when prospects for recovering both principal and accrued interest are considered doubtful or when a default of principal or interest has existed for 90 days or more.

Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. A loan is typically charged off once it is classified as doubtful.

Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal of loan constitutes a current period origination. Current period renewals of credit are re-underwritten at the point of renewal and considered current period originations for purposes of the table below. Bancorp has elected not to disclose revolving loans that have converted to term loans, as activity relating to this disclosure, which is included in the tables is currently immaterial to Bancorp’s loan portfolio and is expected to be in the future.

As of September 30, 2024, the risk rating of loans based on year of origination was as follows:

																	Revolving
																	loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year																amortized
September 30, 2024	2024			2023			2022			2021			2020		Prior		cost basis		Total

Commercial real estate - non-owner occupied:
Risk rating
Pass	$	267,099		$	277,576		$	389,227		$	281,697		$	201,923	$	186,615	$	29,562	$	1,633,699
OAEM		10,138			3,299			-			10,788			1,687		16,264		-		42,176
Substandard		329			-			3,472			983			-		4,636		98		9,518
Substandard non-performing		-			-			175			-			-		880		-		1,055
Doubtful		-			-			-			-			-		-		-		-
Total Commercial real estate non-owner occupied	$	277,566		$	280,875		$	392,874		$	293,468		$	203,610	$	208,395	$	29,660	$	1,686,448
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-	$	-	$	-	$	-

Commercial real estate - owner occupied:
Risk rating
Pass	$	87,386		$	142,309		$	171,652		$	177,702		$	159,819	$	155,188	$	19,200	$	913,256
OAEM		2,465			2,175			4,127			1,637			723		836		-		11,963
Substandard		5,377			8,175			3,782			2,166			3,083		237		-		22,820
Substandard non-performing		688			-			-			745			66		-		-		1,499
Doubtful		-			-			-			-			-		-		-		-
Total Commercial real estate owner occupied	$	95,916		$	152,659		$	179,561		$	182,250		$	163,691	$	156,261	$	19,200	$	949,538
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-	$	-	$	-	$	-

Commercial and industrial - term:
Risk rating
Pass	$	201,368		$	188,227		$	242,852		$	137,162		$	39,052	$	39,779	$	-	$	848,440
OAEM		4,239			1,842			706			20			-		-		-		6,807
Substandard		-			344			-			3,272			13		248		-		3,877
Substandard non-performing		4,337			327			791			-			718		87		-		6,260
Doubtful		-			-			-			-			-		-		-		-
Total Commercial and industrial - term	$	209,944		$	190,740		$	244,349		$	140,454		$	39,783	$	40,114	$	-	$	865,384
Current period gross charge offs	$	(414	)	$	(250	)	$	(6	)	$	(78	)	$	-	$	-	$	-	$	(748	)

Commercial and industrial - lines of credit
Risk rating
Pass	$	54,651		$	12,189		$	8,553		$	2,724		$	313	$	7,044	$	385,822	$	471,296
OAEM		7,448			-			-			-			-		-		23,972		31,420
Substandard		-			-			-			-			-		-		11,193		11,193
Substandard non-performing		-			-			-			-			-		-		-		-
Doubtful		-			-			-			-			-		-		-		-
Total Commercial and industrial - lines of credit	$	62,099		$	12,189		$	8,553		$	2,724		$	313	$	7,044	$	420,987	$	513,909
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-	$	-	$	-	$	-

(continued)

																			Revolving
																			loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year																		amortized
September 30, 2024	2024			2023			2022			2021			2020			Prior			cost basis			Total

Residential real estate - owner occupied
Risk rating
Pass	$	125,235		$	159,671		$	166,028		$	162,706		$	80,459		$	82,282		$	-		$	776,381
OAEM		-			-			-			85			-			-			-			85
Substandard		-			-			13			-			-			344			-			357
Substandard non-performing		902			2,257			1,888			237			9			1,221			-			6,514
Doubtful		-			-			-			-			-			-			-			-
Total Residential real estate - owner occupied	$	126,137		$	161,928		$	167,929		$	163,028		$	80,468		$	83,847		$	-		$	783,337
Current period gross charge offs	$	-		$	(409	)	$	-		$	-		$	-		$	(7	)	$	-		$	(416	)

Residential real estate - non-owner occupied
Risk rating
Pass	$	65,120		$	70,070		$	76,275		$	73,256		$	43,218		$	51,365		$	-		$	379,304
OAEM		-			-			-			-			-			518			-			518
Substandard		-			571			-			-			-			118			-			689
Substandard non-performing		-			-			219			17			-			304			-			540
Doubtful		-			-			-			-			-			-			-			-
Total Residential real estate - non-owner occupied	$	65,120		$	70,641		$	76,494		$	73,273		$	43,218		$	52,305		$	-		$	381,051
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Construction and land development
Risk rating
Pass	$	166,103		$	240,752		$	179,786		$	59,783		$	1,404		$	3,755		$	16,356		$	667,939
OAEM		5,980			-			-			-			-			-			-			5,980
Substandard		-			-			-			-			-			-			999			999
Substandard non-performing		-			-			-			-			-			-			-			-
Doubtful		-			-			-			-			-			-			-			-
Total Construction and land development	$	172,083		$	240,752		$	179,786		$	59,783		$	1,404		$	3,755		$	17,355		$	674,918
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Home equity lines of credit
Risk rating
Pass	$	-		$	-		$	-		$	-		$	-		$	-		$	235,547		$	235,547
OAEM		-			-			-			-			-			-			1,146			1,146
Substandard		-			-			-			-			-			-			36			36
Substandard non-performing		-			-			-			-			-			-			90			90
Doubtful		-			-			-			-			-			-			-			-
Total Home equity lines of credit	$	-		$	-		$	-		$	-		$	-		$	-		$	236,819		$	236,819
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Consumer
Risk rating
Pass	$	19,321		$	20,397		$	13,953		$	6,812		$	1,474		$	1,344		$	80,053		$	143,354
OAEM		-			-			-			-			-			-			-			-
Substandard		-			-			-			-			-			-			-			-
Substandard non-performing		118			11			107			35			24			35			-			330
Doubtful		-			-			-			-			-			-			-			-
Total Consumer	$	19,439		$	20,408		$	14,060		$	6,847		$	1,498		$	1,379		$	80,053		$	143,684
Current period gross charge offs	$	(495	)	$	(17	)	$	(12	)	$	(21	)	$	(7	)	$	(45	)	$	(9	)	$	(606	)

(continued)

																			Revolving
																			loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year																		amortized
September 30, 2024	2024			2023			2022			2021			2020			Prior			cost basis			Total

Leases
Risk rating
Pass	$	5,050		$	5,761		$	2,058		$	1,613		$	754		$	54		$	-		$	15,290
OAEM		-			-			-			-			-			-			-			-
Substandard		38			-			639			601			192			-			-			1,470
Substandard non-performing		-			-			-			-			-			-			-			-
Doubtful		-			-			-			-			-			-			-			-
Total Leases	$	5,088		$	5,761		$	2,697		$	2,214		$	946		$	54		$	-		$	16,760
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Credit cards
Risk rating
Pass	$	-		$	-		$	-		$	-		$	-		$	-		$	26,285		$	26,285
OAEM		-			-			-			-			-			-			-			-
Substandard		-			-			-			-			-			-			-			-
Substandard non-performing		-			-			-			-			-			-			-			-
Doubtful		-			-			-			-			-			-			-			-
Total Credit cards	$	-		$	-		$	-		$	-		$	-		$	-		$	26,285		$	26,285
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	(184	)	$	(184	)

Total loans
Risk rating
Pass	$	991,333		$	1,116,952		$	1,250,384		$	903,455		$	528,416		$	527,426		$	792,825		$	6,110,791
OAEM		30,270			7,316			4,833			12,530			2,410			17,618			25,118			100,095
Substandard		5,744			9,090			7,906			7,022			3,288			5,583			12,326			50,959
Substandard non-performing		6,045			2,595			3,180			1,034			817			2,527			90			16,288
Doubtful		-			-			-			-			-			-			-			-
Total Loans	$	1,033,392		$	1,135,953		$	1,266,303		$	924,041		$	534,931		$	553,154		$	830,359		$	6,278,133
Current period gross charge offs	$	(909	)	$	(676	)	$	(18	)	$	(99	)	$	(7	)	$	(52	)	$	(193	)	$	(1,954	)

As of December 31, 2023, the risk rating of loans based on year of origination was as follows:

																			Revolving
																			loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year																		amortized
December 31, 2023	2023			2022			2021			2020			2019			Prior			cost basis			Total

Commercial real estate - non-owner occupied:
Risk rating
Pass	$	302,787		$	370,728		$	346,600		$	220,144		$	122,732		$	136,624		$	26,187		$	1,525,802
OAEM		76			-			2,902			-			1,947			3,727			-			8,652
Substandard		290			1,093			997			3,587			12,278			243			98			18,586
Substandard non-performing		5,806			286			-			-			1,472			1,085			-			8,649
Doubtful		-			-			-			-			-			-			-			-
Total Commercial real estate non-owner occupied	$	308,959		$	372,107		$	350,499		$	223,731		$	138,429		$	141,679		$	26,285		$	1,561,689
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Commercial real estate - owner occupied:
Risk rating
Pass	$	148,498		$	164,087		$	191,350		$	179,450		$	90,575		$	100,988		$	13,941		$	888,889
OAEM		4,175			221			592			757			395			691			-			6,831
Substandard		1,675			4,258			-			4,370			458			58			-			10,819
Substandard non-performing		-			21			793			71			-			-			-			885
Doubtful		-			-			-			-			-			-			-			-
Total Commercial real estate owner occupied	$	154,348		$	168,587		$	192,735		$	184,648		$	91,428		$	101,737		$	13,941		$	907,424
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Commercial and industrial - term:
Risk rating
Pass	$	279,002		$	298,204		$	172,288		$	56,949		$	24,939		$	26,790		$	-		$	858,172
OAEM		585			819			2,520			87			139			-			-			4,150
Substandard		218			80			31			-			-			273			-			602
Substandard non-performing		3,395			592			29			338			101			1			-			4,456
Doubtful		-			-			-			-			-			-			-			-
Total Commercial and industrial - term	$	283,200		$	299,695		$	174,868		$	57,374		$	25,179		$	27,064		$	-		$	867,380
Current period gross charge offs	$	(1,315	)	$	(734	)	$	(37	)	$	(93	)	$	(37	)	$	(82	)	$	-		$	(2,298	)

Commercial and industrial - lines of credit
Risk rating
Pass	$	30,553		$	22,409		$	3,232		$	348		$	8,931		$	1,783		$	356,237		$	423,493
OAEM		-			-			-			723			20			-			8,585			9,328
Substandard		-			-			-			-			-			-			6,712			6,712
Substandard non-performing		157			-			-			-			-			-			58			215
Doubtful		-			-			-			-			-			-			-			-
Total Commercial and industrial - lines of credit	$	30,710		$	22,409		$	3,232		$	1,071		$	8,951		$	1,783		$	371,592		$	439,748
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	(3,633	)	$	(3,633	)

(continued)

																			Revolving
																			loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year																		amortized
December 31, 2023	2023			2022			2021			2020			2019			Prior			cost basis			Total

Residential real estate - owner occupied
Risk rating
Pass	$	170,446		$	178,088		$	175,561		$	86,105		$	24,354		$	70,213		$	-		$	704,767
OAEM		-			-			89			-			-			-			-			89
Substandard		-			15			-			-			-			355			-			370
Substandard non-performing		1,138			1,122			297			192			162			756			-			3,667
Doubtful		-			-			-			-			-			-			-			-
Total Residential real estate - owner occupied	$	171,584		$	179,225		$	175,947		$	86,297		$	24,516		$	71,324		$	-		$	708,893
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	(43	)	$	-		$	(43	)

Residential real estate - non-owner occupied
Risk rating
Pass	$	83,913		$	84,278		$	77,868		$	49,555		$	31,325		$	30,546		$	-		$	357,485
OAEM		-			7			-			-			262			277			-			546
Substandard		-			-			-			-			-			312			-			312
Substandard non-performing		-			233			19			-			45			75			-			372
Doubtful		-			-			-			-			-			-			-			-
Total Residential real estate - non-owner occupied	$	83,913		$	84,518		$	77,887		$	49,555		$	31,632		$	31,210		$	-		$	358,715
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Construction and land development
Risk rating
Pass	$	157,832		$	239,807		$	69,131		$	34,591		$	478		$	3,711		$	15,623		$	521,173
OAEM		-			-			3,682			-			-			-			999			4,681
Substandard		5,470			-			-			-			-			-			-			5,470
Substandard non-performing		-			-			-			-			-			-			-			-
Doubtful		-			-			-			-			-			-			-			-
Total Construction and land development	$	163,302		$	239,807		$	72,813		$	34,591		$	478		$	3,711		$	16,622		$	531,324
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Home equity lines of credit
Risk rating
Pass	$	-		$	-		$	-		$	-		$	-		$	-		$	210,886		$	210,886
OAEM		-			-			-			-			-			-			-			-
Substandard		-			-			-			-			-			-			37			37
Substandard non-performing		-			-			-			-			-			-			467			467
Doubtful		-			-			-			-			-			-			-			-
Total Home equity lines of credit	$	-		$	-		$	-		$	-		$	-		$	-		$	211,390		$	211,390
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	(12	)	$	(12	)

Consumer
Risk rating
Pass	$	30,823		$	18,399		$	10,148		$	2,832		$	1,931		$	1,765		$	79,105		$	145,003
OAEM		-			-			-			-			-			-			-			-
Substandard		-			-			-			-			-			-			-			-
Substandard non-performing		41			145			91			27			3			14			16			337
Doubtful		-			-			-			-			-			-			-			-
Total Consumer	$	30,864		$	18,544		$	10,239		$	2,859		$	1,934		$	1,779		$	79,121		$	145,340
Current period gross charge offs	$	(683	)	$	(22	)	$	(29	)	$	(43	)	$	(41	)	$	(27	)	$	(20	)	$	(865	)

(continued)

																			Revolving
																			loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year																		amortized
December 31, 2023	2023			2022			2021			2020			2019			Prior			cost basis			Total

Leases
Risk rating
Pass	$	6,801		$	3,442		$	3,117		$	1,723		$	155		$	265		$	-		$	15,503
OAEM		-			-			-			-			-			-			-			-
Substandard		-			-			-			-			-			-			-			-
Substandard non-performing		-			-			-			-			-			-			-			-
Doubtful		-			-			-			-			-			-			-			-
Total Leases	$	6,801		$	3,442		$	3,117		$	1,723		$	155		$	265		$	-		$	15,503
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Credit cards
Risk rating
Pass	$	-		$	-		$	-		$	-		$	-		$	-		$	23,622		$	23,622
OAEM		-			-			-			-			-			-			-			-
Substandard		-			-			-			-			-			-			-			-
Substandard non-performing		-			-			-			-			-			-			10			10
Doubtful		-			-			-			-			-			-			-			-
Total Credit cards	$	-		$	-		$	-		$	-		$	-		$	-		$	23,632		$	23,632
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	(661	)	$	(661	)

Total loans
Risk rating
Pass	$	1,207,296		$	1,379,117		$	1,047,901		$	630,129		$	305,493		$	379,258		$	725,601		$	5,674,795
OAEM		4,836			1,047			9,785			1,567			2,763			4,695			9,584			34,277
Substandard		7,653			5,446			1,028			7,957			12,736			1,241			6,847			42,908
Substandard non-performing		10,537			2,399			1,229			628			1,783			1,931			551			19,058
Doubtful		-			-			-			-			-			-			-			-
Total Loans	$	1,230,322		$	1,388,009		$	1,059,943		$	640,281		$	322,775		$	387,125		$	742,583		$	5,771,038
Current period gross charge offs	$	(1,998	)	$	(756	)	$	(66	)	$	(136	)	$	(78	)	$	(152	)	$	(4,326	)	$	(7,512	)

For certain loan classes, such as credit cards, credit quality is evaluated based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment in credit cards based on payment activity:

	September 30,		December 31,
(in thousands)	2024		2023

Credit cards
Performing	$	26,186	$	23,512
Non-performing		99		120
Total credit cards	$	26,285	$	23,632

Bancorp had $311,000 and $668,000, respectively, in residential real estate loans for which formal foreclosure proceedings were in process at September 30, 2024 and December 31, 2023.

Modifications to Borrowers Experiencing Financial Difficulty

During the three and nine month periods ended September 30, 2024 and 2023 there were no modifications made to loans for borrowers experiencing financial difficulty and there were no payment defaults of existing modified loans within 12 months following modification. Default is determined at 90 days or more past due, charge off, or foreclosure.