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LOANS (Tables)
 6 Months Ended
Jun. 30, 2022
Receivables [Abstract]  
Schedule of Loans Receivable
Portfolio loans, net of deferred costs and fees, are summarized by type as follows at June 30, 2022:
 June 30, 2022
(dollars in thousands)Total% of Total Loans
Portfolio Loans:
Commercial real estate$1,178,758 71.33 %
Residential first mortgages84,782 5.13 %
Residential rentals210,116 12.72 %
Construction and land development31,068 1.88 %
Home equity and second mortgages25,200 1.53 %
Commercial loans43,472 2.63 %
Consumer loans4,511 0.27 %
Commercial equipment74,552 4.51 %
Total portfolio loans (1)
1,652,459 100.00 %
Less: Allowance for Credit Losses(21,404)(1.30)%
Total net portfolio loans1,631,055 
U.S. SBA PPP loans (1)
5,022 
Total net loans$1,636,077 
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 $4.7 million and $4.2 million, at June 30, 2022 and December 31, 2021, respectively.
Non-accrual Loans
Non-accrual loans as of June 30, 2022 and December 31, 2021 were as follows:
June 30, 2022
(dollars in thousands)Nonaccrual with No Allowance for Credit LossesNonaccrual with
Allowance for Credit Losses		Total Nonaccrual Loans
Commercial real estate$4,615 $87 $4,702 
Residential rentals981 — 981 
Home equity and second mortgages267 — 267 
Commercial loans— 25 25 
Commercial equipment10 250 260 
Total$5,873 $362 $6,235 
Interest Income on Nonaccrual Loans$95 $— $95 
June 30, 2022
(dollars in thousands)Non-accrual Delinquent LoansNon-accrual Current LoansTotal Non-accrual Loans
Commercial real estate$— $4,702 $4,702 
Residential rentals— 981 981 
Home equity and second mortgages98 169 267 
Commercial loans— 25 25 
Commercial equipment29 231 260 
$127 $6,108 $6,235 
 December 31, 2021
(dollars in thousands)Non-accrual Delinquent LoansNon-accrual Current LoansTotal Non-accrual Loans
Commercial real estate$— $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 $7,631 
The following table presents the amortized cost basis of collateral-dependent loans by class of loans.
June 30, 2022
(dollars in thousands)Business/Other AssetsReal Estate
Commercial real estate$— $4,702 
Residential first mortgages— 410 
Residential rentals— 981 
Home equity and second mortgages— 266 
Commercial loans25 — 
Commercial equipment699 — 
Total$724 $6,359 
Past Due Financing Receivables An analysis of days past due ("DPD") loans as of June 30, 2022 follows:
 June 30, 2022
(dollars in thousands)31-60 DPD61-89 DPD90 DPD and
Still Accruing		90 DPD and Not AccruingTotal Past DueCurrent Non-Accrual LoansCurrent Accrual LoansTotal Loans
Commercial real estate$625 $— $— $— $625 $4,702 $1,173,431 $1,178,758 
Residential first mortgages— — — — — — 84,782 84,782 
Residential rentals— 185 — — 185 981 208,950 210,116 
Construction and land development— — — — — — 31,068 31,068 
Home equity and second mortgages40 — — 98 138 169 24,893 25,200 
Commercial loans— — — — — 25 43,447 43,472 
Consumer loans14 7 49 — 70 — 4,441 4,511 
Commercial equipment29 — — — 29 231 74,292 74,552 
U.S. SBA PPP— — — — — — 5,022 5,022 
Total Loans$708 $192 $49 $98 $1,047 $6,108 $1,650,326 $1,657,481 
Loan delinquency (total past due) decreased $0.4 million from $1.4 million, or 0.09% of loans, at December 31, 2021 to $1.0 million, or 0.06% of loans, at June 30, 2022.
PCI loans are included as a single category in the table below as management believes there is a lower likelihood of aggregate loss related to these loan pools. Additionally, PCI loans are discounted to allow for the accretion of income on a level yield basis over the life of the loan based on expected cash flows. An analysis of days past due loans as of December 31, 2021 follows:
 December 31, 2021
(dollars in thousands)31-60 Days61-89 Days90 or Greater DaysTotal Past DuePCI LoansCurrentTotal Loan Receivables
Commercial real estate$— $— $— $— $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 and six months ended June 30, 2022 and 2021. 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 EndedJune 30, 2022
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvisionsEnding Balance
Commercial real estate$17,313 $(280)$— $(200)$16,833 
Residential first mortgages284 (111)— 82 255 
Residential rentals1,546 — — 114 1,660 
Construction and land development137 — — 29 166 
Home equity and second mortgages178 — 1 (36)143 
Commercial loans319 (50)1 (32)238 
Consumer loans73 (6)— 65 132 
Commercial equipment1,532 — 42 403 1,977 
 $21,382 $(447)$44 $425 $21,404 
Three Months EndedJune 30, 2021
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvisionsEnding Balance
Commercial real estate$13,285 $(1)$1 $633 $13,918 
Residential first mortgages1,024 — — (177)847 
Residential rentals1,361 — — (175)1,186 
Construction and land development365 — — (33)332 
Home equity and second mortgages263 — 2 (23)242 
Commercial loans1,012 (26)5 122 1,113 
Consumer loans29 — — (1)28 
Commercial equipment917 (34)22 (107)798 
$18,256 $(61)$30 $239 $18,464 
Purchase Credit Impaired**$— $— $— $52 $52 
Six Months EndedJune 30, 2022
(dollars in thousands)Beginning BalanceImpact of ASC
326 Adoption		Charge-offsRecoveriesProvisionsEnding Balance
Commercial real estate$13,095 $3,734 $(280)$— $284 $16,833 
Residential first mortgages1,002 (679)(111)— 43 255 
Residential rentals2,175 (586)— — 71 1,660 
Construction and land development260 (82)— — (12)166 
Home equity and second mortgages274 (86)— 1 (46)143 
Commercial loans582 (290)(50)1 (5)238 
Consumer loans58 2 (6)— 78 132 
Commercial equipment971 483 — 61 462 1,977 
$18,417 $2,496 $(447)$63 $875 $21,404 
_______________________________________
**There is no allowance for credit loss on the SBA PPP portfolios. A more detailed roll forward schedule will be presented if an allowance is required.
Six Months EndedJune 30, 2021
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvisionsEnding Balance
Commercial real estate$13,744 $(1,248)$2 $1,420 $13,918 
Residential first mortgages1,305 (142)— (316)847 
Residential rentals1,413 (46)— (181)1,186 
Construction and land development401 — — (69)332 
Home equity and second mortgages261 — 3 (22)242 
Commercial loans1,222 (76)10 (43)1,113 
Consumer loans20 — — 8 28 
Commercial equipment1,058 (34)37 (263)798 
$19,424 $(1,546)$52 $534 $18,464 
Purchase Credit Impaired**$— $— $— $52 $52 
_______________________________________
**There is no allowance for loan loss on the PCI or the SBA PPP portfolios. A more detailed roll forward schedule will be presented if an allowance is required.
Credit Quality Indicators
Credit quality indicators as of June 30, 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$352,690 $75,430 $107,948 $189,510 $282,681 $149,006 $— $1,157,265 
Watch— 4,239 — 5,566 — 6,986 — 16,791 
Special Mention— — — — — — — — 
Substandard825 — 3,018 — 859 — — 4,702 
Total$353,515 $79,669 $110,966 $195,076 $283,540 $155,992 $— $1,178,758 
Residential Rentals
Pass$46,786 $4,555 $23,050 $43,010 $66,964 $24,770 $— $209,135 
Watch— — — — — — — — 
Special Mention— — — — — — — — 
Substandard981 — — — — — — 981 
Total$47,767 $4,555 $23,050 $43,010 $66,964 $24,770 $— $210,116 
Construction and Land Development
Pass$7,069 $12,082 $7,294 $1,515 $2,762 $346 $— $31,068 
Watch— — — — — — — — 
Special Mention— — — — — — — — 
Substandard— — — — — — — — 
Total$7,069 $12,082 $7,294 $1,515 $2,762 $346 $— $31,068 
Commercial Loans
Pass$25,598 $2,942 $3,278 $1,746 $7,623 $2,260 $— $43,447 
Watch— — — — — — — — 
Special Mention— — — — — — — — 
Substandard— — — 25 — — — 25 
Total$25,598 $2,942 $3,278 $1,771 $7,623 $2,260 $— $43,472 
Commercial Equipment
Pass$9,375 $5,930 $16,662 $8,526 $14,016 $19,443 $— $73,952 
Watch— 180 — — — — — 180 
Special Mention— — 160 — — — — 160 
Substandard29 — 231 — — — — 260 
Total$9,404 $6,110 $17,053 $8,526 $14,016 $19,443 $— $74,552 
Total loans by risk category$443,353 $105,358 $161,641 $249,898 $374,905 $202,811 $— $1,537,966 
Loans evaluated by performance category are as follows:
Term Loans by Origination Year
(dollars in thousands)Prior20182019202020212022Revolving LoansTotal
Residential First Mortgages
Performing$41,010 $3,932 $19,673 $8,904 $5,332 $5,931 $— $84,782 
Non-performing— — — — — — — — 
Total$41,010 $3,932 $19,673 $8,904 $5,332 $5,931 $— $84,782 
Home Equity and Second Mortgages
Performing$16,607 $1,324 $920 $1,337 $3,569 $1,349 $— $25,106 
Non-performing94 — — — — — — 94 
Total$16,701 $1,324 $920 $1,337 $3,569 $1,349 $— $25,200 
Consumer Loans
Performing$53 $3 $126 $161 $733 $464 $2,971 $4,511 
Non-performing— — — — 
Total$53 $3 $126 $161 $733 $464 $2,971 $4,511 
U.S. SBA PPP Loans
Performing$— $— $— $— $5,022 $— $— $5,022 
Non-performing— — — — — — — — 
Total$— $— $— $— $5,022 $— $— $5,022 
Total loans evaluated by performing status$57,764 $5,259 $20,719 $10,402 $14,656 $7,744 $2,971 $119,515 
Total Recorded Investment$501,117 $110,617 $182,360 $260,300 $389,561 $210,555 $2,971 $1,657,481 
Credit quality indicators as of December 31, 2021 were as follows:
 Commercial Real EstateConstruction and Land DevelopmentResidential Rentals
(dollars in thousands)12/31/202112/31/202112/31/2021
Unrated$— $— $— 
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 June 30, 2022 and December 31, 2021 were as follows:
 June 30, 2022December 31, 2021
(dollars in thousands)Number of LoansRecorded InvestmentsNumber of LoansRecorded Investments
Commercial equipment1 $438 1 $447 
Total TDRs1 $438 1 $447 
Less: TDRs included in non-accrual loans— — — — 
Total accrual TDR loans1 $438 1 $447 
Impaired Loans, Including TDRs
Impaired loans, including TDRs at December 31, 2021 and June 30, 2021, were as follows:
 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 equipment1,200 1,022 173 1,195 173 2,184 99 
Total$8,681 $8,228 $266 $8,494 $266 $9,487 $447 
 June 30, 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$12,007 $6,478 $5,294 $11,772 $743 $11,782 $114 $11,802 $224 
Residential first mortgages888 879 — 879 — 880 6 883 18 
Residential rentals999 984 — 984 — 990 12 994 25 
Home equity and second mortgages602 584 — 584 — 615 3 617 6 
Commercial equipment527 475 35 510 35 531 1 549 13 
Total$15,023 $9,400 $5,329 $14,729 $778 $14,798 $136 $14,845 $286 
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 June 30, 2021 and December 31, 2021.
 December 31, 2021June 30, 2021
(dollars in thousands)Ending balance: individually evaluated for impairmentEnding balance: collectively evaluated for impairmentPurchased Credit ImpairedTotalEnding balance: individually evaluated for impairmentEnding balance: collectively evaluated for impairmentPurchased Credit ImpairedTotal
Loan Receivables:
Commercial real estate$4,890 $1,109,479 $1,116 $1,115,485 $11,772 $1,098,578 $1,263 $1,111,613 
Residential first mortgages866 90,254 — 91,120 879 104,603 — 105,482 
Residential rentals942 194,093 — 195,035 984 141,226 — 142,210 
Construction and land development— 35,590 — 35,590 — 36,918 — 36,918 
Home equity and second mortgages601 25,037 — 25,638 584 27,743 399 28,726 
Commercial loans— 50,574 — 50,574 — 47,567 — 47,567 
Consumer loans— 3,002 — 3,002 — 1,442 — 1,442 
Commercial equipment1,195 61,304 — 62,499 510 59,408 — 59,918 
$8,494 $1,569,333 $1,116 $1,578,943 $14,729 $1,517,485 $1,662 $1,533,876 
Allowance for credit losses:
Commercial real estate$93 $13,002 $— $13,095 $743 $13,175 $52 $13,970 
Residential first mortgages— 1,002 — 1,002 — 847 — 847 
Residential rentals— 2,175 — 2,175 — 1,186 — 1,186 
Construction and land development— 260 — 260 — 332 — 332 
Home equity and second mortgages— 274 — 274 — 242 — 242 
Commercial loans— 582 — 582 — 1,113 — 1,113 
Consumer loans— 58 — 58 — 28 — 28 
Commercial equipment173 798 — 971 35 763 — 798 
$266 $18,151 $— $18,417 $778 $17,686 $52 $18,516 
Summary Of Acquired And Non Acquired Loans Table A summary of changes in the accretable yield for PCI loans for the three and six months ended June 30, 2021 and the year ended December 31, 2021 follows:
 Three Months Ended June 30,Six Months Ended June 30,Year Ended
(dollars in thousands)20212021December 31, 2021
Accretable yield, beginning of period$311 $342 $342 
Additions— — — 
Accretion(29)(60)(117)
Reclassification from nonaccretable difference15 15 43 
Other changes, net29 29 55 
Accretable yield, end of period$326 $326 $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 95.68 %
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.