Loans and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2022

Loans and Allowance for Loan Losses

Schedule of total loans outstanding by portfolio segment

	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.

Schedule of past due aging analysis of the loan portfolio

	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

Schedule of loans outstanding, by portfolio segment and risk category

	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

Summary of changes in allowances

	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

Schedule of loans distributed by portfolio segment and impairment methodology

	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

Schedule of impaired loans

	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