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LOANS (Tables)
 3 Months Ended
Mar. 31, 2022
Receivables [Abstract]  
Schedule of Loans Receivable
Portfolio loans, net of deferred costs and fees, are summarized by type as follows at March 31, 2022:
 March 31, 2022
(dollars in thousands)Total% of Total Loans
Portfolio Loans:
Commercial real estate$1,177,761 72.28 %
Residential first mortgages86,416 5.30 %
Residential rentals191,065 11.73 %
Construction and land development30,649 1.88 %
Home equity and second mortgages26,445 1.62 %
Commercial loans48,948 3.00 %
Consumer loans3,592 0.22 %
Commercial equipment64,662 3.97 %
Total portfolio loans (1)
1,629,538 100.00 %
Less: Allowance for Credit Losses(21,382)(1.31)%
Total net portfolio loans1,608,156 
U.S. SBA PPP loans (1)
15,279 
Total net loans$1,623,435 
Portfolio loans are summarized by type as follows at December 31, 2021:
Portfolio Loans:December 31, 2021
Commercial real estate$1,115,485 70.66 %
Residential first mortgages91,120 5.77 %
Residential rentals195,035 12.35 %
Construction and land development35,590 2.25 %
Home equity and second mortgages25,638 1.62 %
Commercial loans50,574 3.20 %
Consumer loans3,002 0.19 %
Commercial equipment62,499 3.96 %
Gross portfolio loans (1)
1,578,943 100.00 %
Adjustments:
Net deferred costs(133)(0.01)%
Allowance for loan losses(18,417)(1.17)%
(18,550)
Net portfolio loans1,560,393 
Gross U.S. SBA PPP loans (1)
27,276 
Net deferred fees(878)
Net U.S. SBA PPP Loans26,398 
Total net loans$1,586,791 
Total gross loans$1,606,219 
(1)Excludes accrued interest receivable of $4.2 million and $4.5 million, at March 31, 2022 and December 31, 2021, respectively.
Non-accrual loans
Non-accrual loans as of March 31, 2022 and December 31, 2021 were as follows:
March 31, 2022
(dollars in thousands)Nonaccrual with No Allowance for Credit LossesNonaccrual with
Allowance for Credit Losses		Total Nonaccrual Loans
Commercial real estate$4,899 $89 $4,988 
Residential first mortgages736 — 736 
Residential rentals672 — 672 
Home equity and second mortgages377 — 377 
Commercial loans— 25 25 
Commercial equipment500 166 666 
U.S. SBA PPP1 — 1 
Total$7,185 $280 $7,465 
Interest Income on Nonaccrual Loans$40 $— $40 
 December 31, 2021
(dollars in thousands)Non-accrual Delinquent LoansNon-accrual Current LoansTotal Non-accrual Loans
Commercial real estate$— $4,890 $4,890 
Residential first mortgages450 — 450 
Residential rentals252 690 942 
Home equity and second mortgages202 399 601 
Commercial equipment— 691 691 
U.S. SBA PPP loans57 — 57 
$961 $6,670 $7,631 
The following table presents the amortized cost basis of collateral-dependent loans by class of loans.
March 31, 2022
(dollars in thousands)Business/Other AssetsReal Estate
Commercial real estate$— $4,987 
Residential first mortgages— 1,149 
Residential rentals— 672 
Home equity and second mortgages— 376 
Commercial loans25 — 
Commercial equipment1,109 — 
Total$1,134 $7,184 
Past Due Financing Receivables An analysis of days past due ("DPD") loans as of March 31, 2022 and December 31, 2021 were as follows:
 March 31, 2022
(dollars in thousands)31-60 DPD61-89 DPD90 DPD and
Still Accruing		CurrentNon-AccrualTotal LoansCurrent Non-Accrual
Commercial real estate$— $— $— $1,172,773 $4,988 $1,177,761 $4,516 
Residential first mortgages— — — 85,680 736 86,416 276 
Residential rentals281 — — 190,112 672 191,065 672 
Construction and land development51 — — 30,598 — 30,649 — 
Home equity and second mortgages— — — 26,068 377 26,445 95 
Commercial loans30 — — 48,893 25 48,948 25 
Consumer loans1 15 20 3,556 — 3,592 — 
Commercial equipment— — — 63,996 666 64,662 666 
U.S. SBA PPP— 8 — 15,270 1 15,279 — 
Total Loans$363 $23 $20 $1,636,946 $7,465 $1,644,817 $6,250 
 December 31, 2021
(dollars in thousands)31-60 Days61-89 Days90 or Greater DaysTotal Past DuePCI LoansCurrentTotal Loan Receivables
Commercial real estate$— $— $— $— $1,116 $1,114,369 $1,115,485 
Residential first mortgages— 277 450 727 — 90,393 91,120 
Residential rentals— 42 252 294 — 194,741 195,035 
Construction and land development— — — — — 35,590 35,590 
Home equity and second mortgages200 — 202 402 — 25,236 25,638 
Commercial loans— — — — — 50,574 50,574 
Consumer loans— — — — — 3,002 3,002 
Commercial equipment— — — — — 62,499 62,499 
Total portfolio loans$200 $319 $904 $1,423 $1,116 $1,576,404 $1,578,943 
U.S. SBA PPP loans$9 $40 $57 $106 $— $27,170 $27,276 
Allowance for Credit Losses on Financing Receivables
The following tables detail activity in the ACL at and for the three months ended March 31, 2022 and 2021, respectively. An allocation of the allowance to one category of loans does not prevent the Company from using that allowance to absorb losses in a different category.
Three Months EndedMarch 31, 2022
(dollars in thousands)Beginning BalanceImpact of ASC 326 AdoptionCharge-offsRecoveriesProvisionsEnding Balance
Commercial real estate$13,095 $3,734 $— $— $484 $17,313 
Residential first mortgages1,002 (679)— — (39)284 
Residential rentals2,175 (586)— — (43)1,546 
Construction and land development260 (82)— — (41)137 
Home equity and second mortgages274 (86)— — (10)178 
Commercial loans582 (290)— 1 26 319 
Consumer loans58 2 — — 13 73 
Commercial equipment971 483 — 18 60 1,532 
 $18,417 $2,496 $— $19 $450 $21,382 
_______________________________________
**There is no allowance for loan loss on the SBA PPP portfolios. A more detailed rollforward schedule will be presented if an allowance is required.
Three Months EndedMarch 31, 2021
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvisionsEnding Balance
Commercial real estate$13,744 $(1,247)$1 $787 $13,285 
Residential first mortgages1,305 (142)— (139)1,024 
Residential rentals1,413 (46)— (6)1,361 
Construction and land development401 — — (36)365 
Home equity and second mortgages261 — 1 1 263 
Commercial loans1,222 (50)5 (165)1,012 
Consumer loans20 — — 9 29 
Commercial equipment1,058 — 15 (156)917 
$19,424 $(1,485)$22 $295 $18,256 
Purchase Credit Impaired**$— $— $— $— $— 
_______________________________________
**There is no allowance for loan loss on the PCI or the SBA PPP portfolios. A more detailed rollforward schedule will be presented if an allowance is required.
Credit Quality Indicators
Credit quality indicators as of March 31, 2022 were as follows:
Credit Risk Profile by Internally Assigned Grade
The risk category of loans by class of loans is as follows:
Term Loans by Origination Year
(dollars in thousands)Prior20182019202020212022Revolving LoansTotal
Commercial Real Estate
Pass$367,685 $77,563 $122,999 $196,400 $281,702 $111,430 $— $1,157,779 
Watch— 4,253 — 5,564 — 7,012 — 16,829 
Special Mention— — — — — — — — 
Substandard3,153 — — — — — — 3,153 
Total$370,838 $81,816 $122,999 $201,964 $281,702 $118,442 $— $1,177,761 
Residential Rentals
Pass$47,557 $4,788 $23,584 $44,156 $67,567 $2,741 $— $190,393 
Watch— — — — — — — — 
Special Mention— — — — — — — — 
Substandard672 — — — — — — 672 
Total$48,229 $4,788 $23,584 $44,156 $67,567 $2,741 $— $191,065 
Construction and Land Development
Pass$8,560 $10,797 $6,642 $1,669 $2,968 $13 $— $30,649 
Watch— — — — — — — — 
Special Mention— — — — — — — — 
Substandard— — — — — — — — 
Total$8,560 $10,797 $6,642 $1,669 $2,968 $13 $— $30,649 
Commercial Loans
Pass$27,484 $6,331 $5,006 $1,848 $6,865 $1,414 $— $48,948 
Watch— — — — — — — — 
Special Mention— — — — — — — — 
Substandard— — — — — — — — 
Total$27,484 $6,331 $5,006 $1,848 $6,865 $1,414 $— $48,948 
Commercial Equipment
Pass$10,247 $6,330 $18,746 $9,076 $15,259 $4,623 $— $64,281 
Watch30 185 — — — — — 215 
Special Mention— — — — — — — — 
Substandard— — 166 — — — — 166 
Total$10,277 $6,515 $18,912 $9,076 $15,259 $4,623 $— $64,662 
Total loans by risk category$465,388 $110,247 $177,143 $258,713 $374,361 $127,233 $— $1,513,085 
Loans evaluated by performance category are as follows:
Term Loans by Origination Year
(dollars in thousands)Prior20182019202020212022Revolving LoansTotal
Residential First Mortgages
Performing$44,141 $4,112 $20,427 $8,958 $6,052 $1,990 $— $85,680 
Non-performing182 — 554 — — — — 736 
Total$44,323 $4,112 $20,981 $8,958 $6,052 $1,990 $— $86,416 
Home Equity and Second Mortgages
Performing$17,581 $1,295 $1,150 $2,120 $3,078 $844 $— $26,068 
Non-performing377 — — — — — — 377 
Total$17,958 $1,295 $1,150 $2,120 $3,078 $844 $— $26,445 
Consumer Loans
Performing$66 $4 $167 $183 $798 $291 $2,063 $3,572 
Non-performing— — 20 20 
Total$66 $4 $167 $183 $798 $291 $2,083 $3,592 
U.S. SBA PPP Loans
Performing$— $— $— $1,137 $14,141 $— $— $15,278 
Non-performing— — — 1 — — — 1 
Total$— $— $— $1,138 $14,141 $— $— $15,279 
Total loans evaluated by performing status$62,347 $5,411 $22,298 $12,399 $24,069 $3,125 $2,083 $131,732 
Total Recorded Investment$527,735 $115,658 $199,441 $271,112 $398,430 $130,358 $2,083 $1,644,817 
Credit quality indicators as of December 31, 2021 were as follows:
 Commercial Real EstateConstruction and Land DevelopmentResidential Rentals
(dollars in thousands)12/31/202112/31/202112/31/2021
Unrated$— $— $— 
Pass1,111,857 35,590 194,093 
Special mention— — — 
Substandard3,628 — 942 
Doubtful— — — 
Loss— — — 
Total$1,115,485 $35,590 $195,035 
 Commercial LoansCommercial EquipmentTotal Commercial Portfolios
(dollars in thousands)12/31/202112/31/202112/31/2021
Unrated$— $— $— 
Pass50,574 62,326 1,454,440 
Special mention— — — 
Substandard— 173 4,743 
Doubtful— — — 
Loss— — — 
Total$50,574 $62,499 $1,459,183 
Non-Commercial Portfolios **U.S. SBA PPP LoansTotal Loans Portfolios
(dollars in thousands)12/31/202112/31/202112/31/2021
Unrated$100,403 $27,276 $127,679 
Pass18,889 — 1,473,329 
Special mention— — — 
Substandard468 — 5,211 
Doubtful— — — 
Loss— — — 
Total$119,760 $27,276 $1,606,219 
_______________________________________
**Non-commercial portfolios are generally evaluated based on payment activity but may be risk graded if part of a larger commercial relationship or are credit impaired (e.g. non-accrual loans, TDRs).
Credit Risk Profile Based on Payment Activity
 Residential First MortgagesHome Equity and Second MortgagesConsumer Loans
(dollars in thousands)12/31/202112/31/202112/31/2021
Performing$90,670 $25,436 $3,002 
Nonperforming450 202 — 
Total$91,120 $25,638 $3,002 
TDRs, Included in Impaired Loans Schedule
TDRs included in the impaired loan schedules above, as of March 31, 2022 and December 31, 2021 were as follows:
 March 31, 2022December 31, 2021
(dollars in thousands)Number of LoansRecorded InvestmentsNumber of LoansRecorded Investments
Commercial real estate— $— — $— 
Commercial equipment1 442 1 447 
Total TDRs1 $442 1 $447 
Less: TDRs included in non-accrual loans— — — — 
Total accrual TDR loans1 $442 1 $447 
Loan Receivable And Allowance Balances Disaggregated On Basis Of Company's Impairment Methodology
The following tables detail loan receivable and allowance balances disaggregated on the basis of the Company’s impairment methodology at March 31, 2021 and December 31, 2021.
 December 31, 2021March 31, 2021
(dollars in thousands)Ending balance: individually evaluated for impairmentEnding balance: collectively evaluated for impairmentPurchase Credit ImpairedTotalEnding balance: individually evaluated for impairmentEnding balance: collectively evaluated for impairmentPurchase Credit ImpairedTotal
Loan Receivables:
Commercial real estate$4,890 $1,109,479 $1,116 $1,115,485 $11,931 $1,067,630 $1,550 $1,081,111 
Residential first mortgages866 90,254 — 91,120 751 115,052 — 115,803 
Residential rentals942 194,093 — 195,035 736 136,786 — 137,522 
Construction and land development— 35,590 — 35,590 — 38,446 — 38,446 
Home equity and second mortgages601 25,037 — 25,638 651 28,309 403 29,363 
Commercial loans— 50,574 — 50,574 — 42,689 — 42,689 
Consumer loans— 3,002 — 3,002 — 1,415 — 1,415 
Commercial equipment1,195 61,304 — 62,499 544 60,290 — 60,834 
$8,494 $1,569,333 $1,116 $1,578,943 $14,613 $1,490,617 $1,953 $1,507,183 
Allowance for loan losses:
Commercial real estate$93 $13,002 $— $13,095 $854 $12,431 $— $13,285 
Residential first mortgages— 1,002 — 1,002 — 1,024 — 1,024 
Residential rentals— 2,175 — 2,175 — 1,361 — 1,361 
Construction and land development— 260 — 260 — 365 — 365 
Home equity and second mortgages— 274 — 274 — 263 — 263 
Commercial loans— 582 — 582 — 1,012 — 1,012 
Consumer loans— 58 — 58 — 29 — 29 
Commercial equipment173 798 — 971 37 880 — 917 
$266 $18,151 $— $18,417 $891 $17,365 $— $18,256 
Summary Of Acquired And Non Acquired Loans Table
A summary of changes in the accretable yield for PCI loans for the three months ended March 31, 2021 and the year ended December 31, 2021 follows:
 Three Months Ended March 31,Year Ended
(dollars in thousands)2021December 31, 2021
Accretable yield, beginning of period$342 $342 
Additions— — 
Accretion(31)(117)
Reclassification from nonaccretable difference— 43 
Other changes, net— 55 
Accretable yield, end of period$311 $323 
The following is a summary of acquired and non-acquired loans as of December 31, 2021:
BY ACQUIRED AND NON-ACQUIREDDecember 31, 2021%
Acquired loans - performing$41,066 2.56 %
Acquired loans - purchase credit impaired ("PCI")1,116 0.07 %
Total acquired loans42,182 2.63 %
U.S. SBA PPP loans27,276 1.70 %
Non-acquired loans**1,536,761 95.67 %
Gross loans1,606,219 
Net deferred fees(1,011)(0.06)%
Total loans, net of deferred fees$1,605,208 
______________________________
**Non-acquired loans include loans transferred from acquired pools following release of acquisition accounting FMV adjustments.
Impaired Loans, Including TDRs
Impaired loans, including TDRs, at March 31, 2021 and at December 31, 2021 were as follows:
 March 31, 2021
(dollars in thousands)Unpaid Contractual Principal BalanceRecorded Investment With No AllowanceRecorded Investment With AllowanceTotal Recorded InvestmentRelated AllowanceQuarter Average Recorded InvestmentQuarter Interest Income RecognizedYTD Average Recorded InvestmentYTD Interest Income Recognized
Commercial real estate$12,029 $5,641 $6,290 $11,931 $854 $11,937 $110 $11,937 $110 
Residential first mortgages794 751 — 751 — 756 11 756 11 
Residential rentals741 736 — 736 — 744 10 744 10 
Home equity and second mortgages666 651 — 651 — 657 4 657 4 
Commercial loans— — — — — — — — — 
Commercial equipment559 507 37 544 37 565 12 565 12 
Total$14,789 $8,286 $6,327 $14,613 $891 $14,659 $147 $14,659 $147 
 December 31, 2021
(dollars in thousands)Unpaid Contractual Principal BalanceRecorded Investment With No AllowanceRecorded Investment With AllowanceTotal Recorded InvestmentRelated AllowanceYTD Average Recorded InvestmentYTD Interest Income Recognized
Commercial real estate$4,994 $4,797 $93 $4,890 $93 $4,866 $254 
Residential first mortgages879 866 — 866 — 874 32 
Residential rentals982 942 — 942 — 959 48 
Home equity and second mortgages626 601 — 601 — 604 14 
Commercial loans— — — — — — — 
Commercial equipment1,200 1,022 173 1,195 173 2,184 99 
Total$8,681 $8,228 $266 $8,494 $266 $9,487 $447