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LOANS (Tables)
 9 Months Ended
Sep. 30, 2022
Receivables [Abstract]  
Schedule of Loans Receivable
Portfolio loans, net of deferred costs and fees, are summarized by type as follows at September 30, 2022:
 September 30, 2022
(dollars in thousands)Total% of Total Loans
Portfolio Loans:
Commercial real estate$1,202,660 68.98 %
Residential first mortgages83,081 4.77 %
Residential rentals282,365 16.20 %
Construction and land development23,197 1.33 %
Home equity and second mortgages26,054 1.49 %
Commercial loans41,615 2.39 %
Consumer loans5,754 0.33 %
Commercial equipment78,551 4.51 %
Total portfolio loans (1)
1,743,277 100.00 %
Less: Allowance for Credit Losses(22,027)(1.26)%
Total net portfolio loans1,721,250 
U.S. SBA PPP loans (1)
1,211 
Total net loans$1,722,461 
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 $5.2 million and $4.5 million, at September 30, 2022 and December 31, 2021, respectively.
Non-accrual Loans
Non-accrual loans as of September 30, 2022 and December 31, 2021 were as follows:
September 30, 2022
(dollars in thousands)Nonaccrual with No Allowance for Credit LossesNonaccrual with
Allowance for Credit Losses		Total Nonaccrual Loans
Commercial real estate$4,577 $84 $4,661 
Residential rentals1,153 — 1,153 
Home equity and second mortgages240 — 240 
Commercial loans— 25 25 
Commercial equipment211 — 211 
Total$6,181 $109 $6,290 
Interest Income on Nonaccrual Loans$63 $— $63 
September 30, 2022
(dollars in thousands)Non-accrual Delinquent LoansNon-accrual Current LoansTotal Non-accrual Loans
Commercial real estate$— $4,661 $4,661 
Residential rentals454 699 1,153 
Home equity and second mortgages124 116 240 
Commercial loans— 25 25 
Commercial equipment— 211 211 
$578 $5,712 $6,290 
 December 31, 2021
(dollars in thousands)Non-accrual Delinquent LoansNon-accrual Current LoansTotal Non-accrual Loans
Commercial real estate$— $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 $7,631 
The following table presents the amortized cost basis of collateral-dependent loans by class of loans.
September 30, 2022
(dollars in thousands)Business/Other AssetsReal Estate
Commercial real estate$— $4,660 
Residential first mortgages— — 
Residential rentals— 972 
Home equity and second mortgages— 240 
Commercial loans25 — 
Commercial equipment645 — 
Total$670 $5,872 
Past Due Financing Receivables An analysis of days past due ("DPD") loans as of September 30, 2022 follows:
 September 30, 2022
(dollars in thousands)31-60 DPD61-89 DPD90 DPD and
Still Accruing		90 DPD and Not AccruingTotal Past DueCurrent Non-Accrual LoansCurrent Accrual LoansTotal Loans
Commercial real estate$— $— $— $— $— $4,661 $1,197,999 $1,202,660 
Residential first mortgages— — — — — — 83,081 83,081 
Residential rentals32 181 — 273 486 699 281,180 282,365 
Construction and land development— — — — — — 23,197 23,197 
Home equity and second mortgages204 — — 124 328 116 25,610 26,054 
Commercial loans— — — — — 25 41,590 41,615 
Consumer loans19 5 31 — 55 — 5,699 5,754 
Commercial equipment— — — — — 211 78,340 78,551 
U.S. SBA PPP272 — — — 272 — 939 1,211 
Total Loans$527 $186 $31 $397 $1,141 $5,712 $1,737,635 $1,744,488 
Loan delinquency (total past due) decreased $0.3 million from $1.4 million, or 0.09% of loans, at December 31, 2021 to $1.1 million, or 0.07% of loans, at September 30, 2022.
PCI loans are included as a single category in the table below as management believes there is a lower likelihood of aggregate loss related to these loan pools. Additionally, PCI loans are discounted to allow for the accretion of income on a level yield basis over the life of the loan based on expected cash flows. An analysis of days past due loans as of December 31, 2021 follows:
 December 31, 2021
(dollars in thousands)31-60 Days61-89 Days90 or Greater DaysTotal Past DuePCI LoansCurrentTotal Loan Receivables
Commercial real estate$— $— $— $— $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 nine months ended September 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 EndedSeptember 30, 2022
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvisionsEnding Balance
Commercial real estate$16,833 $— $— $203 $17,036 
Residential first mortgages255 — 14 (32)237 
Residential rentals1,660 — — 885 2,545 
Construction and land development166 — — 31 197 
Home equity and second mortgages143 — — (1)142 
Commercial loans238 (49)1 64 254 
Consumer loans132 (14)— 24 142 
Commercial equipment1,977 (29)6 (480)1,474 
 $21,404 $(92)$21 $694 $22,027 
Three Months EndedSeptember 30, 2021
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvisionsEnding Balance
Commercial real estate$13,918 $(491)$4 $(12)$13,419 
Residential first mortgages847 — — 65 912 
Residential rentals1,186 — — 614 1,800 
Construction and land development332 — — 36 368 
Home equity and second mortgages242 — 1 6 249 
Commercial loans1,113 — 529 (733)909 
Consumer loans28 — — 14 42 
Commercial equipment798 — 20 10 828 
$18,464 $(491)$554 $— $18,527 
Purchase Credit Impaired**$52 $— $— $— $52 
Nine Months Ended
September 30, 2022
(dollars in thousands)Beginning BalanceImpact of ASC
326 Adoption		Charge-offsRecoveriesProvisionsEnding Balance
Commercial real estate$13,095 $3,734 $(280)$— $487 $17,036 
Residential first mortgages1,002 (679)(111)14 11 237 
Residential rentals2,175 (586)— — 956 2,545 
Construction and land development260 (82)— — 19 197 
Home equity and second mortgages274 (86)— 1 (47)142 
Commercial loans582 (290)(99)2 59 254 
Consumer loans58 2 (20)— 102 142 
Commercial equipment971 483 (29)67 (18)1,474 
$18,417 $2,496 $(539)$84 $1,569 $22,027 
_______________________________________
**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.
Nine Months Ended
September 30, 2021
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvisionsEnding Balance
Commercial real estate$13,744 $(1,739)$6 $1,408 $13,419 
Residential first mortgages1,305 (142)— (251)912 
Residential rentals1,413 (46)— 433 1,800 
Construction and land development401 — — (33)368 
Home equity and second mortgages261 — 4 (16)249 
Commercial loans1,222 (76)539 (776)909 
Consumer loans20 — — 22 42 
Commercial equipment1,058 (34)57 (253)828 
$19,424 $(2,037)$606 $534 $18,527 
Purchase Credit Impaired**$— $— $— $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 September 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$335,465 $74,482 $107,720 $188,070 $282,781 $187,151 $— $1,175,669 
Watch5,588 4,216 — 5,567 — 6,960 — 22,331 
Special Mention— — — — — — — — 
Substandard808 — 2,999 — 853 — — 4,660 
Total$341,861 $78,698 $110,719 $193,637 $283,634 $194,111 $— $1,202,660 
Residential Rentals
Pass$45,188 $4,495 $21,141 $42,263 $65,468 $102,838 $— $281,393 
Watch— — — — — — — — 
Special Mention— — — — — — — — 
Substandard972 — — — — — — 972 
Total$46,160 $4,495 $21,141 $42,263 $65,468 $102,838 $— $282,365 
Construction and Land Development
Pass$4,550 $8,987 $5,094 $1,399 $2,529 $638 $— $23,197 
Watch— — — — — — — — 
Special Mention— — — — — — — — 
Substandard— — — — — — — — 
Total$4,550 $8,987 $5,094 $1,399 $2,529 $638 $— $23,197 
Commercial Loans
Pass$23,516 $2,628 $2,708 $1,868 $7,792 $3,078 $— $41,590 
Watch— — — — — — — — 
Special Mention— — — — — — — — 
Substandard— — — 25 — — — 25 
Total$23,516 $2,628 $2,708 $1,893 $7,792 $3,078 $— $41,615 
Commercial Equipment
Pass$8,737 $5,363 $15,519 $7,995 $13,290 $27,100 $— $78,004 
Watch— 175 — — — — — 175 
Special Mention— — 160 — — — — 160 
Substandard— — 212 — — — — 212 
Total$8,737 $5,538 $15,891 $7,995 $13,290 $27,100 $— $78,551 
Total loans by risk category$424,824 $100,346 $155,553 $247,187 $372,713 $327,765 $— $1,628,388 
Loans evaluated by performance category are as follows:
Term Loans by Origination Year
(dollars in thousands)Prior20182019202020212022Revolving LoansTotal
Residential First Mortgages
Performing$39,498 $3,891 $19,542 $8,577 $5,279 $6,294 $— $83,081 
Non-performing— — — — — — — — 
Total$39,498 $3,891 $19,542 $8,577 $5,279 $6,294 $— $83,081 
Home Equity and Second Mortgages
Performing$15,900 $1,383 $933 $1,384 $3,881 $2,474 $— $25,955 
Non-performing99 — — — — — — 99 
Total$15,999 $1,383 $933 $1,384 $3,881 $2,474 $— $26,054 
Consumer Loans
Performing$42 $3 $108 $139 $678 $850 $3,903 $5,723 
Non-performing— — 31 31 
Total$42 $3 $108 $139 $678 $850 $3,934 $5,754 
U.S. SBA PPP Loans
Performing$— $— $— $— $1,211 $— $— $1,211 
Non-performing— — — — — — — — 
Total$— $— $— $— $1,211 $— $— $1,211 
Total loans evaluated by performing status$55,539 $5,277 $20,583 $10,100 $11,049 $9,618 $3,934 $116,100 
Total Recorded Investment$480,363 $105,623 $176,136 $257,287 $383,762 $337,383 $3,934 $1,744,488 
Credit quality indicators as of December 31, 2021 were as follows:
 Commercial Real EstateConstruction and Land DevelopmentResidential Rentals
(dollars in thousands)12/31/202112/31/202112/31/2021
Unrated$— $— $— 
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 September 30, 2022 and December 31, 2021 were as follows:
 September 30, 2022December 31, 2021
(dollars in thousands)Number of LoansRecorded InvestmentsNumber of LoansRecorded Investments
Commercial equipment1$433 1$447 
Total TDRs1$433 1$447 
Less: TDRs included in non-accrual loans—— —— 
Total accrual TDR loans1$433 1$447 
Impaired Loans, Including TDRs
Impaired loans, including TDRs at December 31, 2021 and September 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 
 September 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$3,205 $2,377 $759 $3,136 $291 $3,146 $25 $3,177 $80 
Residential first mortgages884 872 — 872 — 873 7 878 25 
Residential rentals990 961 — 961 — 961 13 956 38 
Home equity and second mortgages602 580 — 580 — 581 3 583 10 
Commercial equipment490 455 32 487 32 489 5 493 16 
Total$6,171 $5,245 $791 $6,036 $323 $6,050 $53 $6,087 $169 
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 September 30, 2021 and December 31, 2021.
 December 31, 2021September 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 $3,136 $1,084,356 $1,144 $1,088,636 
Residential first mortgages866 90,254 — 91,120 872 95,963 — 96,835 
Residential rentals942 194,093 — 195,035 961 171,121 — 172,082 
Construction and land development— 35,590 — 35,590 — 37,139 — 37,139 
Home equity and second mortgages601 25,037 — 25,638 580 25,938 — 26,518 
Commercial loans— 50,574 — 50,574 — 48,327 — 48,327 
Consumer loans— 3,002 — 3,002 — 2,168 — 2,168 
Commercial equipment1,195 61,304 — 62,499 487 60,859 — 61,346 
$8,494 $1,569,333 $1,116 $1,578,943 $6,036 $1,525,871 $1,144 $1,533,051 
Allowance for credit losses:
Commercial real estate$93 $13,002 $— $13,095 $291 $13,128 $52 $13,471 
Residential first mortgages— 1,002 — 1,002 — 912 — 912 
Residential rentals— 2,175 — 2,175 — 1,800 — 1,800 
Construction and land development— 260 — 260 — 368 — 368 
Home equity and second mortgages— 274 — 274 — 249 — 249 
Commercial loans— 582 — 582 — 909 — 909 
Consumer loans— 58 — 58 — 42 — 42 
Commercial equipment173 798 — 971 32 796 — 828 
$266 $18,151 $— $18,417 $323 $18,204 $52 $18,579 
Summary Of Acquired And Non Acquired Loans Table A summary of changes in the accretable yield for PCI loans for the three and nine months ended September 30, 2021 and the year ended December 31, 2021 follows:
 Three Months Ended September 30,Nine Months Ended September 30,Year Ended
(dollars in thousands)20212021December 31, 2021
Accretable yield, beginning of period$324 $342 $342 
Additions— — — 
Accretion(31)(92)(117)
Reclassification from nonaccretable difference15 29 43 
Other changes, net(15)14 55 
Accretable yield, end of period$293 $293 $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.