The following table presents total loans outstanding, by portfolio segment, as of June 30, 2022 and December 31, 2021:

(1)	Included Paycheck Protection Program, or PPP, loans of $6.9 million at June 30, 2022 and $33.6 million at December 31, 2021.

Total loans included net deferred loan fees and costs of $928 thousand and $231 thousand at June 30, 2022 and December 31, 2021, respectively. Deferred loan fees on PPP loans were $106 thousand at June 30, 2022 and $881 thousand at December 31, 2021.

Management monitors the credit quality of its loan portfolio on an ongoing basis. Measurements of delinquency and past due status are based on the contractual terms of each loan. Past due loans are reviewed regularly to identify loans for nonaccrual status. Loan modifications made in accordance with the Interagency Statement on Loan Modifications and Reporting for Financial Institutions, as issued on April 7, 2020, are included as accruing current.

The following tables present a past due aging analysis of total loans outstanding, by portfolio segment, as of June 30, 2022 and December 31, 2021:


	June 30, 2022
					90 Days
	Accruing		30 - 89 Days		or More				Total
(dollars in thousands)	Current		Past Due		Past Due		Nonaccrual		Loans
Commercial
Commercial and industrial	$	482,743	$	82	$	—	$	1,601	$	484,426
Real estate construction		48,833		37		—		—		48,870
Commercial real estate		599,108		—		—		629		599,737
Total commercial		1,130,684		119		—		2,230		1,133,033
Consumer
Residential real estate first mortgage		565,443		1,255		—		1,873		568,571
Residential real estate junior lien		134,636		426		—		193		135,255
Other revolving and installment		53,123		187		—		74		53,384
Total consumer		753,202		1,868		—		2,140		757,210
Total loans	$	1,883,886	$	1,987	$	—	$	4,370	$	1,890,243


	December 31, 2021
					90 Days
	Accruing		30 - 89 Days		or More				Total
(dollars in thousands)	Current		Past Due		Past Due		Nonaccrual		Loans
Commercial
Commercial and industrial	$	435,135	$	168	$	121	$	1,337	$	436,761
Real estate construction		40,619		—		—		—		40,619
Commercial real estate		598,264		—		—		629		598,893
Total commercial		1,074,018		168		121		1,966		1,076,273
Consumer
Residential real estate first mortgage		508,925		1,770		—		21		510,716
Residential real estate junior lien		125,412		167		—		89		125,668
Other revolving and installment		45,242		121		—		—		45,363
Total consumer		679,579		2,058		—		110		681,747
Total loans	$	1,753,597	$	2,226	$	121	$	2,076	$	1,758,020

The Company’s consumer loan portfolio is primarily comprised of secured loans that are evaluated at origination on a centralized basis against standardized underwriting criteria. The Company generally does not risk rate consumer loans unless a default event such as bankruptcy or extended nonperformance takes place. Credit quality for the consumer loan portfolio is measured by delinquency rates, nonaccrual amounts and actual losses incurred.

The Company assigns a risk rating to all commercial loans, except pools of homogeneous loans, and periodically performs detailed internal and external reviews of risk rated loans over a certain threshold to identify credit risks and to assess the overall collectability of the portfolio. These risk ratings are also subject to examination by the Company’s regulators. During the internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which the borrowers operate and the estimated fair values of collateral securing the loans. These credit quality indicators are used to assign a risk rating to each individual loan.

The Company’s ratings are aligned to pass and criticized categories. The criticized category includes special mention, substandard, and doubtful risk ratings. The risk ratings are defined as follows:

Pass: A pass loan is a credit with no existing or known potential weaknesses deserving of management’s close attention.

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, this potential weakness may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

Substandard: Loans classified as substandard are not adequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. Well-defined weaknesses include a borrower’s lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time, or the failure to fulfill economic expectations. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

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.

Loss: Loans classified as loss are considered uncollectible and charged off immediately.

The tables below present total loans outstanding, by loan portfolio segment, and risk category as of June 30, 2022 and December 31, 2021:


	June 30, 2022
			Criticized
			Special
(dollars in thousands)	Pass		Mention		Substandard		Doubtful		Total
Commercial
Commercial and industrial	$	479,586	$	1,204	$	3,636	$	—	$	484,426
Real estate construction		48,870		—		—		—		48,870
Commercial real estate		589,552		4,689		5,496		—		599,737
Total commercial		1,118,008		5,893		9,132		—		1,133,033
Consumer
Residential real estate first mortgage		566,368		65		2,138		—		568,571
Residential real estate junior lien		134,537		—		718		—		135,255
Other revolving and installment		53,310		—		74		—		53,384
Total consumer		754,215		65		2,930		—		757,210
Total loans	$	1,872,223	$	5,958	$	12,062	$	—	$	1,890,243


	December 31, 2021
			Criticized
			Special
(dollars in thousands)	Pass		Mention		Substandard		Doubtful		Total
Commercial
Commercial and industrial	$	430,235	$	480	$	6,046	$	—	$	436,761
Real estate construction		40,619		—		—		—		40,619
Commercial real estate		585,291		—		13,602		—		598,893
Total commercial		1,056,145		480		19,648		—		1,076,273
Consumer
Residential real estate first mortgage		510,375		—		341		—		510,716
Residential real estate junior lien		124,898		—		770		—		125,668
Other revolving and installment		45,363		—		—		—		45,363
Total consumer		680,636		—		1,111		—		681,747
Total loans	$	1,736,781	$	480	$	20,759	$	—	$	1,758,020

The adequacy of the allowance for loan losses is assessed at the end of each quarter. The allowance for loan losses includes a specific component related to loans that are individually evaluated for impairment and a general component related to loans that are segregated into homogeneous pools and collectively evaluated for impairment. The factors applied to these pools are an estimate of probable incurred losses based on management’s evaluation of historical net losses from loans with similar characteristics, which are adjusted by management to reflect current events, trends, and conditions. The adjustments include consideration of the following: changes in lending policies and procedures, economic conditions, nature and volume of the portfolio, experience of lending management, volume and severity of past due loans, quality of the loan review system, value of underlying collateral for collateral dependent loans, concentrations, and other external factors.

The following tables present, by loan portfolio segment, a summary of the changes in the allowance for loan losses for the three and six months ended June 30, 2022 and 2021:


	Three months ended June 30, 2022
	Beginning		Provision for		Loan		Loan		Ending
(dollars in thousands)	Balance		Loan Losses		Charge-offs		Recoveries		Balance
Commercial
Commercial and industrial	$	9,795	$	1,085	$	(637)	$	90	$	10,333
Real estate construction		810		68		—		—		878
Commercial real estate		11,946		(1,123)		—		11		10,834
Total commercial		22,551		30		(637)		101		22,045
Consumer
Residential real estate first mortgage		6,661		(486)		—		—		6,175
Residential real estate junior lien		1,400		(134)		—		201		1,467
Other revolving and installment		644		(5)		(37)		32		634
Total consumer		8,705		(625)		(37)		233		8,276
Unallocated		457		595		—		—		1,052
Total	$	31,713	$	—	$	(674)	$	334	$	31,373


	Six months ended June 30, 2022
	Beginning		Provision for		Loan		Loan		Ending
(dollars in thousands)	Balance		Loan Losses		Charge-offs		Recoveries		Balance
Commercial
Commercial and industrial	$	8,925	$	1,856	$	(664)	$	216	$	10,333
Real estate construction		783		95		—		—		878
Commercial real estate		12,376		(1,564)		—		22		10,834
Total commercial		22,084		387		(664)		238		22,045
Consumer
Residential real estate first mortgage		6,532		(357)		—		—		6,175
Residential real estate junior lien		1,295		(42)		—		214		1,467
Other revolving and installment		481		140		(55)		68		634
Total consumer		8,308		(259)		(55)		282		8,276
Unallocated		1,180		(128)		—		—		1,052
Total	$	31,572	$	—	$	(719)	$	520	$	31,373


	Three months ended June 30, 2021
	Beginning		Provision for		Loan		Loan		Ending
(dollars in thousands)	Balance		Loan Losses		Charge-offs		Recoveries		Balance
Commercial
Commercial and industrial	$	10,487	$	(869)	$	(273)	$	275	$	9,620
Real estate construction		598		(11)		—		—		587
Commercial real estate		13,849		(913)		—		1		12,937
Total commercial		24,934		(1,793)		(273)		276		23,144
Consumer
Residential real estate first mortgage		6,047		129		—		—		6,176
Residential real estate junior lien		1,288		99		—		14		1,401
Other revolving and installment		666		(81)		(49)		38		574
Total consumer		8,001		147		(49)		52		8,151
Unallocated		823		1,646		—		—		2,469
Total	$	33,758	$	—	$	(322)	$	328	$	33,764


	Six months ended June 30, 2021
	Beginning		Provision for		Loan		Loan		Ending
(dollars in thousands)	Balance		Loan Losses		Charge-offs		Recoveries		Balance
Commercial
Commercial and industrial	$	10,205	$	(553)	$	(477)	$	445	$	9,620
Real estate construction		658		(71)		—		—		587
Commercial real estate		14,105		(636)		(536)		4		12,937
Total commercial		24,968		(1,260)		(1,013)		449		23,144
Consumer
Residential real estate first mortgage		5,774		402		—		—		6,176
Residential real estate junior lien		1,373		(69)		—		97		1,401
Other revolving and installment		753		(164)		(93)		78		574
Total consumer		7,900		169		(93)		175		8,151
Unallocated		1,378		1,091		—		—		2,469
Total	$	34,246	$	—	$	(1,106)	$	624	$	33,764

The following tables present the recorded investment in loans and related allowance for loan losses, by loan portfolio segment, disaggregated on the basis of the Company’s impairment methodology, as of June 30, 2022 and December 31, 2021:


	June 30, 2022
	Recorded Investment						Allowance for Loan Losses
	Individually		Collectively				Individually		Collectively
(dollars in thousands)	Evaluated		Evaluated		Total		Evaluated		Evaluated		Total
Commercial
Commercial and industrial	$	1,769	$	482,657	$	484,426	$	828	$	9,505	$	10,333
Real estate construction		—		48,870		48,870		—		878		878
Commercial real estate		803		598,934		599,737		3		10,831		10,834
Total commercial		2,572		1,130,461		1,133,033		831		21,214		22,045
Consumer
Residential real estate first mortgage		1,873		566,698		568,571		—		6,175		6,175
Residential real estate junior lien		193		135,062		135,255		—		1,467		1,467
Other revolving and installment		74		53,310		53,384		27		607		634
Total consumer		2,140		755,070		757,210		27		8,249		8,276
Unallocated		—		—		—		—		—		1,052
Total loans	$	4,712	$	1,885,531	$	1,890,243	$	858	$	29,463	$	31,373


	December 31, 2021
	Recorded Investment						Allowance for Loan Losses
	Individually		Collectively				Individually		Collectively
(dollars in thousands)	Evaluated		Evaluated		Total		Evaluated		Evaluated		Total
Commercial
Commercial and industrial	$	1,831	$	434,930	$	436,761	$	278	$	8,647	$	8,925
Real estate construction		—		40,619		40,619		—		783		783
Commercial real estate		809		598,084		598,893		5		12,371		12,376
Total commercial		2,640		1,073,633		1,076,273		283		21,801		22,084
Consumer
Residential real estate first mortgage		21		510,695		510,716		—		6,532		6,532
Residential real estate junior lien		91		125,577		125,668		—		1,295		1,295
Other revolving and installment		—		45,363		45,363		—		481		481
Total consumer		112		681,635		681,747		—		8,308		8,308
Unallocated		—		—		—		—		—		1,180
Total loans	$	2,752	$	1,755,268	$	1,758,020	$	283	$	30,109	$	31,572

The tables below summarize key information on impaired loans. These impaired loans may have estimated losses which are included in the allowance for loan losses.


	June 30, 2022						December 31, 2021
	Recorded		Unpaid		Related		Recorded		Unpaid		Related
(dollars in thousands)	Investment		Principal		Allowance		Investment		Principal		Allowance
Impaired loans with a valuation allowance
Commercial and industrial	$	1,008	$	1,036	$	828	$	445	$	464	$	278
Commercial real estate		174		195		3		180		203		5
Residential real estate junior lien		—		—		—		—		—		—
Other revolving and installment		74		74		27		—		—		—
Total impaired loans with a valuation allowance		1,256		1,305		858		625		667		283
Impaired loans without a valuation allowance
Commercial and industrial		761		873		—		1,386		1,575		—
Commercial real estate		629		684		—		629		684		—
Residential real estate first mortgage		1,873		1,910		—		21		24		—
Residential real estate junior lien		193		226		—		91		120		—
Other revolving and installment		—		—		—		—		—		—
Total impaired loans without a valuation allowance		3,456		3,693		—		2,127		2,403		—
Total impaired loans
Commercial and industrial		1,769		1,909		828		1,831		2,039		278
Commercial real estate		803		879		3		809		887		5
Residential real estate first mortgage		1,873		1,910		—		21		24		—
Residential real estate junior lien		193		226		—		91		120		—
Other revolving and installment		74		74		27		—		—		—
Total impaired loans	$	4,712	$	4,998	$	858	$	2,752	$	3,070	$	283

The table below presents the average recorded investment in impaired loans and interest income for the three and six months ended June 30, 2022 and 2021:


	Three months ended June 30,
	2022				2021
	Average				Average
	Recorded		Interest		Recorded		Interest
(dollars in thousands)	Investment		Income		Investment		Income
Impaired loans with a valuation allowance
Commercial and industrial	$	1,018	$	2	$	1,548	$	3
Commercial real estate		176		2		188		2
Residential real estate first mortgage		—		—		—		—
Residential real estate junior lien		—		—		27		—
Other revolving and installment		75		—		13		—
Total impaired loans with a valuation allowance		1,269		4		1,776		5
Impaired loans without a valuation allowance
Commercial and industrial		761		—		1,174		5
Commercial real estate		629		—		4,472		—
Residential real estate first mortgage		1,962		—		23		—
Residential real estate junior lien		196		—		302		—
Other revolving and installment		—		—		—		—
Total impaired loans without a valuation allowance		3,548		—		5,971		5
Total impaired loans
Commercial and industrial		1,779		2		2,722		8
Commercial real estate		805		2		4,660		2
Residential real estate first mortgage		1,962		—		23		—
Residential real estate junior lien		196		—		329		—
Other revolving and installment		75		—		13		—
Total impaired loans	$	4,817	$	4	$	7,747	$	10


	Six Months Ended June 30,
	2022				2021
	Average				Average
	Recorded		Interest		Recorded		Interest
(dollars in thousands)	Investment		Income		Investment		Income
Impaired loans with a valuation allowance
Commercial and industrial	$	1,156	$	6	$	1,637	$	6
Commercial real estate		177		3		190		4
Residential real estate junior lien		—		—		30		—
Other revolving and installment		157		—		14		—
Total impaired loans with a valuation allowance		1,490		9		1,871		10
Impaired loans without a valuation allowance
Commercial and industrial		761		—		1,187		11
Commercial real estate		629		—		4,662		—
Residential real estate first mortgage		1,953		—		24		—
Residential real estate junior lien		198		—		303		—
Other revolving and installment		—		—		—		—
Total impaired loans without a valuation allowance		3,541		—		6,176		11
Total impaired loans
Commercial and industrial		1,917		6		2,824		17
Commercial real estate		806		3		4,852		4
Residential real estate first mortgage		1,953		—		24		—
Residential real estate junior lien		198		—		333		—
Other revolving and installment		157		—		14		—
Total impaired loans	$	5,031	$	9	$	8,047	$	21

Loans with a carrying value of $1.3 billion as of June 30, 2022 and $1.2 billion as of December 31, 2021, were pledged to secure public deposits, and for other purposes required or permitted by law.

Under certain circumstances, the Company will provide borrowers relief through loan restructurings. A restructuring of debt constitutes a troubled debt restructuring, or TDR, if the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. TDR concessions can include a reduction of interest rates, an extension of maturity dates, forgiveness of principal or interest due, or acceptance of other assets in full or partial satisfaction of the debt.

During the second quarter of 2022, there were no loans modified as a TDR. During the second quarter of 2021, there were 3 loans modified as TDRs as a result of changing the terms allowing for the interest rate reductions and an extension of the maturity dates. As of June 30, 2021, the carrying value of the restructured loans was $795 thousand. The loans are not currently performing in compliance with the modified terms and were placed on nonaccrual. There was no specific reserve for loan losses allocated to the loans modified as TDRs.

The Company does not have material commitments to lend additional funds to borrowers with loans whose terms have been modified in TDRs or whose loans are on nonaccrual