XML 24 R12.htm IDEA: XBRL DOCUMENT v3.22.2.2
Loans and Allowance for Loan Losses
9 Months Ended
Sep. 30, 2022
Loans and Allowance for Loan Losses  
Loans and Allowance for Loan Losses

NOTE 5 Loans and Allowance for Loan Losses

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

​

​

​

​

​

​

​

​

​

    

September 30, 

    

December 31, 

(dollars in thousands)

    

2022

    

2021

Commercial

​

​

​

​

​

​

Commercial and industrial (1)

​

$

564,655

​

$

436,761

Real estate construction

​

 

89,215

​

 

40,619

Commercial real estate

​

 

819,068

​

 

598,893

Total commercial

​

 

1,472,938

​

 

1,076,273

Consumer

​

 

  

​

 

  

Residential real estate first mortgage

​

 

649,818

​

 

510,716

Residential real estate junior lien

​

 

143,681

​

 

125,668

Other revolving and installment

​

 

51,794

​

 

45,363

Total consumer

​

 

845,293

​

 

681,747

Total loans

​

$

2,318,231

​

$

1,758,020

(1)Included Paycheck Protection Program, or PPP, loans of $2.9 million at September 30, 2022 and $33.6 million at December 31, 2021.

​

Total loans included net deferred loan fees and costs of $851 thousand and $231 thousand at September 30, 2022 and December 31, 2021, respectively. Deferred loan fees on PPP loans were $22 thousand at September 30, 2022 and $881 thousand at December 31, 2021. Unearned discounts associated with the acquisition of Metro Phoenix Bank totaled $8.0 million as of September 30, 2022.

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 September 30, 2022 and December 31, 2021:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 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

​

$

561,865

​

$

311

​

$

1,000

​

$

1,479

​

$

564,655

Real estate construction

​

 

89,215

​

 

—

​

 

—

​

 

—

​

 

89,215

Commercial real estate

​

 

818,439

​

 

—

​

 

—

​

 

629

​

 

819,068

Total commercial

​

 

1,469,519

​

 

311

​

 

1,000

​

 

2,108

​

 

1,472,938

Consumer

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Residential real estate first mortgage

​

 

645,896

​

 

1,923

​

 

—

​

 

1,999

​

 

649,818

Residential real estate junior lien

​

 

143,491

​

 

2

​

 

—

​

 

188

​

 

143,681

Other revolving and installment

​

 

51,601

​

 

185

​

 

—

​

 

8

​

 

51,794

Total consumer

​

 

840,988

​

 

2,110

​

 

—

​

 

2,195

​

 

845,293

Total loans

​

$

2,310,507

​

$

2,421

​

$

1,000

​

$

4,303

​

$

2,318,231

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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 September 30, 2022 and December 31, 2021:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2022

​

​

​

​

​

Criticized

​

​

​

​

​

​

​

​

Special

​

​

​

​

​

​

​

​

​

(dollars in thousands)

    

Pass

    

Mention

    

Substandard

    

Doubtful

    

Total

Commercial

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Commercial and industrial

​

$

559,647

​

$

—

​

$

5,008

​

$

—

​

$

564,655

Real estate construction

​

 

89,215

​

 

—

​

 

—

​

 

—

​

 

89,215

Commercial real estate

​

 

809,910

​

 

3,840

​

 

5,318

​

 

—

​

 

819,068

Total commercial

​

​

1,458,772

​

​

3,840

​

​

10,326

​

​

—

​

​

1,472,938

Consumer

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Residential real estate first mortgage

​

 

647,517

​

 

64

​

 

2,237

​

 

—

​

 

649,818

Residential real estate junior lien

​

 

143,006

​

 

—

​

 

675

​

 

—

​

 

143,681

Other revolving and installment

​

 

51,786

​

 

—

​

 

8

​

 

—

​

 

51,794

Total consumer

​

 

842,309

​

 

64

​

 

2,920

​

 

—

​

 

845,293

Total loans

​

$

2,301,081

​

$

3,904

​

$

13,246

​

$

—

​

$

2,318,231

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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 nine months ended September 30, 2022 and 2021:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended September 30, 2022

​

​

Beginning

​

Provision for

​

Loan

​

Loan

​

Ending

(dollars in thousands)

    

Balance

    

Loan Losses

    

Charge-offs

    

Recoveries

    

Balance

Commercial

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Commercial and industrial

​

$

10,333

​

$

(845)

​

$

(672)

​

$

105

​

$

8,921

Real estate construction

​

 

878

​

 

378

​

 

—

​

 

76

​

 

1,332

Commercial real estate

​

 

10,834

​

 

1,335

​

 

—

​

 

101

​

 

12,270

Total commercial

​

 

22,045

​

 

868

​

 

(672)

​

 

282

​

 

22,523

Consumer

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Residential real estate first mortgage

​

 

6,175

​

 

(584)

​

 

—

​

 

—

​

 

5,591

Residential real estate junior lien

​

 

1,467

​

 

(109)

​

 

—

​

 

7

​

 

1,365

Other revolving and installment

​

 

634

​

 

(75)

​

 

(75)

​

 

53

​

 

537

Total consumer

​

 

8,276

​

 

(768)

​

 

(75)

​

 

60

​

 

7,493

Unallocated

​

 

1,052

​

 

(100)

​

 

—

​

 

—

​

 

952

Total

​

$

31,373

​

$

—

​

$

(747)

​

$

342

​

$

30,968

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine months ended September 30, 2022

​

​

Beginning

​

Provision for

​

Loan

​

Loan

​

Ending

(dollars in thousands)

    

Balance

    

Loan Losses

    

Charge-offs

    

Recoveries

    

Balance

Commercial

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

$

8,925

​

$

1,011

​

$

(1,336)

​

$

321

​

$

8,921

Real estate construction

​

​

783

​

​

473

​

​

—

​

​

76

​

​

1,332

Commercial real estate

​

​

12,376

​

​

(229)

​

​

—

​

​

123

​

​

12,270

Total commercial

​

​

22,084

​

​

1,255

​

​

(1,336)

​

​

520

​

​

22,523

Consumer

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential real estate first mortgage

​

​

6,532

​

​

(941)

​

​

—

​

​

—

​

​

5,591

Residential real estate junior lien

​

​

1,295

​

​

(151)

​

​

—

​

​

221

​

​

1,365

Other revolving and installment

​

​

481

​

​

65

​

​

(130)

​

​

121

​

​

537

Total consumer

​

​

8,308

​

​

(1,027)

​

​

(130)

​

​

342

​

​

7,493

Unallocated

​

​

1,180

​

​

(228)

​

​

—

​

​

—

​

​

952

Total

​

$

31,572

​

$

—

​

$

(1,466)

​

$

862

​

$

30,968

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended September 30, 2021

​

​

Beginning

​

Provision for

​

Loan

​

Loan

​

Ending

(dollars in thousands)

    

Balance

    

Loan Losses

    

Charge-offs

    

Recoveries

    

Balance

Commercial

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

$

9,620

​

$

(825)

​

$

(747)

​

$

1,052

​

$

9,100

Real estate construction

​

​

587

​

 

92

​

 

—

​

 

—

​

​

679

Commercial real estate

​

​

12,937

​

 

(413)

​

 

—

​

 

—

​

​

12,524

Total commercial

​

​

23,144

​

 

(1,146)

​

 

(747)

​

 

1,052

​

​

22,303

Consumer

​

​

​

​

 

  

​

 

  

​

 

  

​

​

​

Residential real estate first mortgage

​

​

6,176

​

 

625

​

 

—

​

 

—

​

​

6,801

Residential real estate junior lien

​

​

1,401

​

 

6

​

 

—

​

 

16

​

​

1,423

Other revolving and installment

​

​

574

​

 

(32)

​

 

(46)

​

 

27

​

​

523

Total consumer

​

​

8,151

​

​

599

​

​

(46)

​

​

43

​

​

8,747

Unallocated

​

​

2,469

​

 

(1,453)

​

​

—

​

​

—

​

​

1,016

Total

​

$

33,764

​

$

(2,000)

​

$

(793)

​

$

1,095

​

$

32,066

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine months ended September 30, 2021

​

​

Beginning

​

Provision for

​

Loan

​

Loan

​

Ending

(dollars in thousands)

    

Balance

    

Loan Losses

    

Charge-offs

    

Recoveries

    

Balance

Commercial

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Commercial and industrial

​

$

10,205

​

$

(1,378)

​

$

(1,224)

​

$

1,497

​

$

9,100

Real estate construction

​

 

658

​

 

21

​

 

—

​

 

—

​

 

679

Commercial real estate

​

 

14,105

​

 

(1,049)

​

 

(536)

​

 

4

​

 

12,524

Total commercial

​

 

24,968

​

 

(2,406)

​

 

(1,760)

​

 

1,501

​

 

22,303

Consumer

​

 

​

​

 

  

​

 

  

​

 

  

​

 

  

Residential real estate first mortgage

​

 

5,774

​

 

1,027

​

 

—

​

 

—

​

 

6,801

Residential real estate junior lien

​

 

1,373

​

 

(63)

​

 

—

​

​

113

​

 

1,423

Other revolving and installment

​

 

753

​

 

(196)

​

 

(139)

​

 

105

​

 

523

Total consumer

​

 

7,900

​

 

768

​

 

(139)

​

 

218

​

 

8,747

Unallocated

​

 

1,378

​

 

(362)

​

 

—

​

 

—

​

 

1,016

Total

​

$

34,246

​

$

(2,000)

​

$

(1,899)

​

$

1,719

​

$

32,066

​

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 September 30, 2022 and December 31, 2021:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 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

​

$

2,083

​

$

562,572

​

$

564,655

​

$

264

​

$

8,657

​

$

8,921

Real estate construction

​

 

—

​

 

89,215

​

 

89,215

​

​

—

​

​

1,332

​

​

1,332

Commercial real estate

​

 

800

​

 

818,268

​

 

819,068

​

​

—

​

​

12,270

​

​

12,270

Total commercial

​

 

2,883

​

 

1,470,055

​

 

1,472,938

​

​

264

​

​

22,259

​

​

22,523

Consumer

​

 

  

​

 

  

​

 

  

​

​

​

​

​

​

​

​

​

Residential real estate first mortgage

​

 

1,998

​

 

647,820

​

 

649,818

​

​

—

​

​

5,591

​

​

5,591

Residential real estate junior lien

​

 

188

​

 

143,493

​

 

143,681

​

​

—

​

​

1,365

​

​

1,365

Other revolving and installment

​

 

8

​

 

51,786

​

 

51,794

​

​

—

​

​

537

​

​

537

Total consumer

​

 

2,194

​

 

843,099

​

 

845,293

​

​

—

​

​

7,493

​

​

7,493

Unallocated

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

952

Total loans

​

$

5,077

​

$

2,313,154

​

$

2,318,231

​

$

264

​

$

29,752

​

$

30,968

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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 table below summarizes key information on impaired loans. These impaired loans may have estimated losses which are included in the allowance for loan losses:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 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

​

$

712

​

$

744

​

$

264

​

$

445

​

$

464

​

$

278

Commercial real estate

​

 

—

​

 

—

​

 

—

​

 

180

​

 

203

​

 

5

Residential real estate junior lien

​

 

—

​

 

—

​

​

—

​

​

—

​

 

—

​

​

—

Other revolving and installment

​

 

—

​

 

—

​

 

—

​

​

—

​

 

—

​

 

—

Total impaired loans with a valuation allowance

​

​

712

​

​

744

​

​

264

​

​

625

​

​

667

​

​

283

Impaired loans without a valuation allowance

 

​

  

 

​

  

 

​

  

​

​

  

 

​

  

 

​

  

Commercial and industrial

​

​

1,371

​

​

1,476

​

​

—

​

​

1,386

​

​

1,575

​

​

—

Commercial real estate

​

 

800

​

​

855

​

 

—

​

​

629

​

 

684

​

 

—

Residential real estate first mortgage

​

 

1,998

​

 

2,077

​

 

—

​

​

21

​

 

24

​

 

—

Residential real estate junior lien

​

 

188

​

 

211

​

 

—

​

​

91

​

 

120

​

 

—

Other revolving and installment

​

 

8

​

 

8

​

 

—

​

​

—

​

 

—

​

 

—

Total impaired loans without a valuation allowance

​

​

4,365

​

​

4,627

​

​

—

​

​

2,127

​

​

2,403

​

​

—

Total impaired loans

​

 

  

​

 

  

​

 

  

​

​

  

​

 

  

​

 

  

Commercial and industrial

​

​

2,083

​

​

2,220

​

​

264

​

​

1,831

​

​

2,039

​

​

278

Commercial real estate

​

 

800

​

 

855

​

 

—

​

 

809

​

 

887

​

 

5

Residential real estate first mortgage

​

​

1,998

​

​

2,077

​

​

—

​

​

21

​

​

24

​

​

—

Residential real estate junior lien

​

 

188

​

 

211

​

 

—

​

 

91

​

 

120

​

 

—

Other revolving and installment

​

 

8

​

 

8

​

 

—

​

 

—

​

 

—

​

 

—

Total impaired loans

​

$

5,077

​

$

5,371

​

$

264

​

$

2,752

​

$

3,070

​

$

283

​

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended September 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

​

$

722

​

$

3

​

$

719

​

$

3

Commercial real estate

​

​

—

​

​

—

​

​

779

​

​

2

Residential real estate first mortgage

​

​

—

​

​

—

​

​

—

​

​

—

Residential real estate junior lien

​

​

—

​

​

—

​

​

8

​

​

—

Other revolving and installment

​

​

—

​

​

—

​

​

4

​

​

—

Total impaired loans with a valuation allowance

​

​

722

​

​

3

​

​

1,510

​

​

5

Impaired loans without a valuation allowance

 

​

​

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

​

1,371

​

​

7

​

​

2,016

​

​

5

Commercial real estate

​

​

801

​

​

2

​

​

3,793

​

​

—

Residential real estate first mortgage

​

​

2,032

​

​

—

​

​

121

​

​

—

Residential real estate junior lien

​

​

189

​

​

—

​

​

166

​

​

—

Other revolving and installment

​

​

8

​

​

—

​

​

—

​

​

—

Total impaired loans without a valuation allowance

​

​

4,401

​

​

9

​

​

6,096

​

​

5

Total impaired loans

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

​

2,093

​

​

10

​

​

2,735

​

​

8

Commercial real estate

​

​

801

​

​

2

​

​

4,572

​

​

2

Residential real estate first mortgage

​

​

2,032

​

​

—

​

​

121

​

​

—

Residential real estate junior lien

​

​

189

​

​

—

​

​

174

​

​

—

Other revolving and installment

​

​

8

​

​

—

​

​

4

​

​

—

Total impaired loans

​

$

5,123

​

$

12

​

$

7,606

​

$

10

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine Months Ended September 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

​

$

833

​

$

8

​

$

818

​

$

10

Commercial real estate

​

 

—

​

 

—

​

 

782

​

 

6

Residential real estate junior lien

​

 

—

​

 

—

​

 

11

​

 

—

Other revolving and installment

​

 

—

​

 

—

​

 

3

​

 

—

Total impaired loans with a valuation allowance

​

​

833

​

​

8

​

​

1,614

​

​

16

Impaired loans without a valuation allowance

​

​

  

 

​

  

 

​

  

 

​

  

Commercial and industrial

​

​

1,291

​

​

21

​

​

2,061

​

​

15

Commercial real estate

​

 

805

​

 

5

​

 

3,980

​

 

—

Residential real estate first mortgage

​

 

2,108

​

 

—

​

 

114

​

 

—

Residential real estate junior lien

​

 

193

​

 

—

​

 

190

​

​

—

Other revolving and installment

​

 

11

​

 

—

​

 

—

​

 

—

Total impaired loans without a valuation allowance

​

​

4,408

​

​

26

​

​

6,345

​

​

15

Total impaired loans

​

 

  

​

 

  

​

 

  

​

 

  

Commercial and industrial

​

​

2,124

​

​

29

​

​

2,879

​

​

25

Commercial real estate

​

 

805

​

 

5

​

 

4,762

​

 

6

Residential real estate first mortgage

​

 

2,108

​

 

—

​

 

114

​

 

—

Residential real estate junior lien

​

 

193

​

 

—

​

 

201

​

 

—

Other revolving and installment

​

 

11

​

 

—

​

 

3

​

 

—

Total impaired loans

​

$

5,241

​

$

34

​

$

7,959

​

$

31

​

Loans with a carrying value of $1.4 billion as of September 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 third quarter of 2022 and 2021, there were no loans modified as a TDR.

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.