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Note 4- Loans/Leases Receivable

12 Months Ended

Dec. 31, 2022

Note 4. Loans/Leases Receivable

The composition of the loan/lease portfolio as of December 31, 2022 and 2021 is presented as follows:


	December 31, 2022		December 31, 2021

	(dollars in thousands)

C&I:
C&I - revolving	$	296,869	$	248,483
C&I - other *		1,451,693		1,346,602
		1,748,562		1,595,085

CRE - owner occupied		629,367		421,701
CRE - non-owner occupied		963,239		646,500
Construction and land development		1,192,061		918,571
Multi-family		963,803		600,412
Direct financing leases**		31,889		45,191
1-4 family real estate***		499,529		377,361
Consumer		110,421		75,311
		6,138,871		4,680,132
Allowance for credit losses		(87,706)		(78,721)
	$	6,051,165	$	4,601,411
** Direct financing leases:
Net minimum lease payments to be received	$	34,754	$	49,362
Estimated unguaranteed residual values of leased assets		165		165
Unearned lease/residual income		(3,030)		(4,336)
		31,889		45,191
Plus deferred lease origination costs, net of fees		226		568
		32,115		45,759
Less allowance for credit losses		(970)		(1,546)
	$	31,145	$	44,213

* Includes equipment financing agreements outstanding at m2, totaling $278.0 million and $225.1 million as of December 31, 2022 and 2021, respectively and PPP loans totaling $68.3 thousand and $28.2 million as of December 31, 2022 and December 31, 2021, respectively.

Management performs an evaluation of the estimated unguaranteed residual values of leased assets on an annual basis, at a minimum. The evaluation consists of discussions with reputable and current vendors and management’s expertise and understanding of the current states of particular industries to determine informal valuations of the equipment. As necessary and where available, management will utilize valuations by independent appraisers. The majority of leases with residual values contain a lease options rider which requires the lessee to pay the residual value directly, finance the payment of the residual value, or extend the lease term to pay the residual value. In these cases, the residual value is protected and the risk of loss is minimal.

At December 31, 2022 and December 31, 2021, the Company had two leases remaining with residual values totaling $165 thousand that were not protected with a lease end options rider. Management has performed specific evaluations of these unguaranteed residual values and determined that the valuations are appropriate. There were no losses related to unguaranteed residual values during the years ended December 31, 2022, 2021, and 2020.

***Includes residential real estate loans held for sale totaling $1.5 million and $3.8 million as of December 31, 2022 and 2021, respectively.

Note 4. Loans/Leases Receivable (continued)

Accrued interest on loans, which is excluded from the amortized cost of loans, totaled $24.3 million and $15.3 million at December 31, 2022 and December 31, 2021, respectively, and was included in other assets on the consolidated balance sheets.

Changes in accretable discounts on acquired loans for the years ended December 31, 2022, 2021 and 2020, respectively, are presented as follows:


	Year ended
	December 31, 2022		December 31, 2021
	Total		Total

	(dollars in thousands)

Balance at the beginning of the period	$	(1,533)	$	(3,139)
Discount added at acquisition		(13,381)		—
Accretion recognized		8,826		1,606
Balance at the end of the period	$	(6,088)	$	(1,533)


	Year ended December 31, 2020
	PCI		Performing
	Loans		Loans		Total
	(dollars in thousands)

Balance at the beginning of the period	$	(57)	$	(6,378)	$	(6,435)
Reclassification of nonaccretable discount to accretable		(530)		—		(530)
Reclassification of nonaccretable discount to allowance		—		353		353
Accretion recognized		587		2,886		3,473
Balance at the end of the period	$	—	$	(3,139)	$	(3,139)

Note 4. Loans/Leases Receivable (continued)

The aging of the loan/lease portfolio by classes of loans/leases as of December 31, 2022 and 2021 is presented as follows:


	2022
										Accruing Past
				30-59 Days			60-89 Days			Due 90 Days or			Nonaccrual
Classes of Loans/Leases	Current			Past Due			Past Due			More			Loans/Leases			Total

	(dollars in thousands)
C&I:
C&I - revolving	$	296,869		$	—		$	—		$	—		$	—	$		296,869
C&I - other		1,442,629			4,800			1,124			5			3,135			1,451,693
CRE - owner occupied		625,611			1,166			—			—			2,590			629,367
CRE - non-owner occupied		962,444			421			—			—			374			963,239
Construction and land development		1,191,929			—			—			—			132			1,192,061
Multi-family		963,803			—			—			—			—			963,803
Direct financing leases		31,557			141			56			—			135			31,889
1-4 family real estate		495,936			1,030			517			—			2,046			499,529
Consumer		110,041			27			—			—			353			110,421
	$	6,120,819		$	7,585		$	1,697		$	5		$	8,765		$	6,138,871

As a percentage of total loan/lease portfolio		99.71	%		0.12	%		0.03	%		0.00	%		0.14	%		100.00	%


	2021
										Accruing Past
				30-59 Days			60-89 Days			Due 90 Days or			Nonaccrual
Classes of Loans/Leases	Current			Past Due			Past Due			More			Loans/Leases			Total

	(dollars in thousands)

C&I
C&I - revolving	$	248,483		$	—		$	—		$	—		$	—		$	248,483
C&I - other		1,337,034			859			7,308			1			1,400			1,346,602
CRE - owner occupied		421,701			—			—			—			—			421,701
CRE - non-owner occupied		646,500			—			—			—			—			646,500
Construction and land development		918,498			—			—			—			73			918,571
Multi-family		600,412			—			—			—			—			600,412
Direct financing leases		44,174			10			160			—			847			45,191
1-4 family real estate		374,912			1,325			716			—			408			377,361
Consumer		75,272			8			—			—			31			75,311
	$	4,666,986		$	2,202		$	8,184		$	1		$	2,759		$	4,680,132

As a percentage of total loan/lease portfolio		99.72	%		0.05	%		0.17	%		0.00	%		0.06	%		100.00	%

Note 4. Loans/Leases Receivable (continued)

NPLs by classes of loans/leases as of December 31, 2022 and 2021 is presented as follows:


	2022
	Accruing Past		Nonaccrual		Nonaccrual
	Due 90 Days or		Loans/Leases		Loans/Leases				Percentage of
Classes of Loans/Leases	More		with an ACL		without an ACL		Total NPLs		Total NPLs

	(dollars in thousands)
C&I:
C&I - revolving	$	—	$	—	$	—	$	—	-	%
C&I - other		5		2,775		360		3,140	35.80
CRE - owner occupied		—		1,738		852		2,590	29.53
CRE - non-owner occupied		—		68		306		374	4.26
Construction and land development		—		132		—		132	1.51
Multi-family		—		—		—		—	-
Direct financing leases		—		80		55		135	1.54
1-4 family real estate		—		1,641		405		2,046	23.33
Consumer		—		353		—		353	4.03
	$	5	$	6,787	$	1,978	$	8,770	100.00	%


	2021
	Accruing Past		Nonaccrual		Nonaccrual
	Due 90 Days or		Loans/Leases		Loans/Leases				Percentage of
Classes of Loans/Leases	More		with an ACL		without an ACL		Total NPLs		Total NPLs

		(dollars in thousands)

C&I:
C&I - revolving	$	—	$	—	$	—	$	—	-	%
C&I - other		1		1,130		270		1,401	50.77
CRE - owner occupied		—		—		—		—	-
CRE - non-owner occupied		—		—		—		—	-
Construction and land development		—		73		—		73	2.64
Multi-family		—		—		—		—	-
Direct financing leases		—		115		732		847	30.69
1-4 family real estate		—		408		—		408	14.78
Consumer		—		31		—		31	1.12
	$	1	$	1,757	$	1,002	$	2,760	100.00	%

The Company did not recognize any interest income on nonaccrual loans during the year ended December 31, 2022 and 2021.

Note 4. Loans/Leases Receivable (continued)

Changes in the ACL loans/leases by portfolio segment for the years ended December 31, 2022, 2021, and 2020 are presented as follows:


	Year Ended December 31, 2022
							CRE		CRE		Construction				1-4
			C&I -		C&I -		Owner		Non-Owner		and Land		Multi-		Family
	C&I		Revolving		Other*		Occupied		Occupied		Development		Family		Real Estate		Consumer		Total

	(dollars in thousands)

Balance, beginning	$	—	$	3,907	$	25,982	$	8,501	$	8,549	$	16,972	$	9,339	$	4,541	$	930	$	78,721
Initial ACL recorded for PCD loans		—		600		7		2,481		1,076		1,100		481		137		20		5,902
Provision**		—		(50)		7,364		(1,023)		2,220		(2,981)		3,323		306		477		9,636
Charge-offs		—		—		(6,417)		—		(193)		(829)		—		(21)		(65)		(7,525)
Recoveries		—		—		817		6		97		—		43		—		9		972
Balance, ending	$	—	$	4,457	$	27,753	$	9,965	$	11,749	$	14,262	$	13,186	$	4,963	$	1,371	$	87,706

*Included within the C&I-other column are ACL on leases with a beginning balance of $1.5 million, provision of $269 thousand, charge-offs of $1.1 million and recoveries of $273 thousand. ACL on leases was $970 thousand as of December 31, 2022.

** Provision of the year ended December 31, 2022, included $11.0 million related to the acquired Guaranty Bank non-PCD loans.


	Year Ended December 31, 2021
									CRE		CRE		Construction				Direct		Residential		1-4
			C&I -		C&I -				Owner		Non-Owner		and Land		Multi-		Financing		Real		Family
	C&I		Revolving		Other*		CRE		Occupied		Occupied		Development		Family		Leases		Estate		Real Estate		Consumer		Total

	(dollars in thousands)

Balance, beginning	$	35,421	$	—	$	—	$	42,161	$	—	$	—	$	—	$	—	$	1,764	$	3,732	$	—	$	1,298	$	84,376
Adoption of ASU 2016-13		(35,421)		2,982		29,130		(42,161)		8,696		11,428		11,999		5,836		(1,764)		(3,732)		5,042		(137)		(8,102)
Provision		—		925		(1,451)		—		(198)		(1,088)		4,973		3,653		—		—		(603)		(509)		5,702
Charge-offs		—		—		(2,287)		—		—		(1,876)		—		(150)		—		—		(179)		(46)		(4,538)
Recoveries		—		—		590		—		3		85		—		—		—		—		281		324		1,283
Balance, ending	$	—	$	3,907	$	25,982	$	—	$	8,501	$	8,549	$	16,972	$	9,339	$	—	$	—	$	4,541	$	930	$	78,721

*Included within the C&I-other column are ACL on leases with a beginning balance of $1.8.million, adoption impact of $685 thousand, negative provision of $703 thousand, charge-offs of $458 thousand and recoveries of $258 thousand. ACL on leases was $1.5 million as of December 31, 2021.


	Year Ended December 31, 2020
					Direct Financing		Residential Real		Installment and
	C&I			CRE	Leases		Estate		Other Consumer		Total

	(dollars in thousands)

Balance, beginning	$	16,072	$	15,379	$	1,464	$	1,948	$	1,138	$	36,001
Provisions charged to expense		22,899		28,671		2,148		1,755		231		55,704
Loans/leases charged off		(4,199)		(2,071)		(1,993)		—		(120)		(8,383)
Recoveries on loans/leases previously charged off		649		182		145		29		49		1,054
Balance, ending	$	35,421	$	42,161	$	1,764	$	3,732	$	1,298	$	84,376

Note 4. Loans/Leases Receivable (continued)

The composition of the ACL loans/leases by portfolio segment based on evaluation method are as follows:


	Year ended December 31, 2022
	Amortized Cost of Loans Receivable						Allowance for Credit Losses
	Individually		Collectively				Individually		Collectively
	Evaluated for		Evaluated for				Evaluated for		Evaluated for
	Credit Losses		Credit Losses		Total		Credit Losses		Credit Losses		Total

	(dollars in thousands)
C&I :
C&I - revolving	$	3,386	$	293,483	$	296,869	$	961	$	3,496	$	4,457
C&I - other*		9,358		1,474,224		1,483,582		1,445		26,308		27,753
		12,744		1,767,707		1,780,451		2,406		29,804		32,210
CRE - owner occupied		24,880		604,487		629,367		2,853		7,112		9,965
CRE - non-owner occupied		21,588		941,651		963,239		869		10,880		11,749
Construction and land development		10,394		1,181,667		1,192,061		13		14,249		14,262
Multi-family		1,302		962,501		963,803		395		12,791		13,186
1-4 family real estate		3,177		496,352		499,529		317		4,646		4,963
Consumer		741		109,680		110,421		75		1,296		1,371
	$	74,826	$	6,064,045	$	6,138,871	$	6,928	$	80,778	$	87,706

*Included within the C&I – other category are leases individually evaluated of $135 thousand with a related allowance for credit losses of $24 thousand and leases collectively evaluated of $31.8 million with a related allowance for credit losses of $946 thousand.


	As of December 31, 2021
	Amortized Cost of Loans Receivable						Allowance for Credit Losses
	Individually		Collectively				Individually		Collectively
	Evaluated for		Evaluated for				Evaluated for		Evaluated for
	Credit Losses		Credit Losses		Total		Credit Losses		Credit Losses		Total

	(dollars in thousands)
C&I :
C&I - revolving	$	2,638	$	245,845	$	248,483	$	168	$	3,739	$	3,907
C&I - other*		13,456		1,378,337		1,391,793		743		25,239		25,982
		16,094		1,624,182		1,640,276		911		28,978		29,889
CRE - owner occupied		3,841		417,860		421,701		1,264		7,237		8,501
CRE - non-owner occupied		25,006		621,494		646,500		—		8,549		8,549
Construction and land development		10,436		908,135		918,571		11		16,961		16,972
Multi-family		—		600,412		600,412		—		9,339		9,339
1-4 family real estate		2,950		374,411		377,361		329		4,212		4,541
Consumer		350		74,961		75,311		39		891		930
	$	58,677	$	4,621,455	$	4,680,132	$	2,554	$	76,167	$	78,721

*Included within the C&I – other category are leases individually evaluated of $847 thousand with a related allowance for credit losses of $35 thousand and leases collectively evaluated of $44.4 million with a related allowance for credit losses of $1.5 million.

Note 4. Loans/Leases Receivable (continued)

The following table presents the amortized cost basis of collateral dependent loans, by the primary collateral type, which are individually evaluated to determine expected credit losses:



	Year ended December 31, 2022
					Non
	Commercial		Owner-occupied		Owner-Occupied		Owner Occupied
	Assets		CRE		Real Estate		Real Estate		Securities		Equipment		Other		Total

	(dollars in thousands)
C & I:
C&I - revolving	$	3,281	$	—	$	—	$	—	$	—	$	105	$	—	$	3,386
C&I - other*		1,589		210		—		—		108		7,289		162		9,358
		4,870		210		—		—		108		7,394		162		12,744
CRE - owner occupied		—		24,814		—		66		—		—		—		24,880
CRE - non-owner occupied		—		—		21,588		—		—		—		—		21,588
Construction and land development		—		—		10,394		—		—		—		—		10,394
Multi-family		—		—		1,302		—		—		—		—		1,302
1-4 family real estate		—		—		33		3,144		—		—		—		3,177
Consumer		—		—		120		608		—		—		13		741
	$	4,870	$	25,024	$	33,437	$	3,818	$	108	$	7,394	$	175	$	74,826

*Included within the C&I – other category are leases individually evaluated of $135 thousand with primary collateral of equipment.


	As of December 31, 2021
					Non
	Commercial		Owner-occupied		Owner-Occupied		Owner Occupied
	Assets		CRE		Real Estate		Real Estate		Securities		Equipment		Other		Total

	(dollars in thousands)
C & I:
C&I - revolving	$	2,518	$	—	$	—	$	—	$	—	$	120	$	—	$	2,638
C&I - other*		683		—		—		2,471		134		9,877		291		13,456
		3,201		—		—		2,471		134		9,997		291		16,094
CRE - owner occupied		—		—		—		3,841		—		—		—		3,841
CRE - non-owner occupied		—		—		25,006		—		—		—		—		25,006
Construction and land development		—		—		10,362		74		—		—		—		10,436
Multi-family		—		—		—		—		—		—		—		—
1-4 family real estate		—		—		817		2,133		—		—		—		2,950
Consumer		—		—		—		340		—		1		9		350
	$	3,201	$	—	$	36,185	$	8,859	$	134	$	9,998	$	300	$	58,677

*Included within the C&I – other category are leases individually evaluated of $847 thousand with primary collateral of equipment.

For certain C&I loans, all CRE loans, certain construction and land development loans, all multifamily loans, certain 1-4 family real estate loans and certain consumer loans, the Company’s credit quality indicator consists of internally assigned risk ratings. Each such loan is assigned a risk rating upon origination. The risk rating is reviewed every 15 months, at a minimum, and on an as-needed basis depending on the specific circumstances of the loan.

For certain C&I loans (including equipment financing agreements and direct financing leases), certain construction and land development loans, certain 1-4 family real estate loans, and certain consumer loans, the Company’s credit quality indicator is performance determined by delinquency status. Delinquency status is updated daily by the Company’s loan system.

Note 4. Loans/Leases Receivable (continued)

The following tables show the credit quality indicator of loans by class of receivable and year of origination as of December 31, 2022:


	2022
	Term Loans
	Amortized Cost Basis by Origination Year
													Revolving
													Loans
Internally Assigned													Amortized
Risk Rating	2022		2021		2020		2019		2018		Prior		Cost Basis		Total

	(dollars in thousands)
C&I - revolving
Pass (Ratings 1 through 5)	$	—	$	—	$	—	$	—	$	—	$	—	$	275,888	$	275,888
Special Mention (Rating 6)		—		—		—		—		—		—		17,595		17,595
Substandard (Rating 7)		—		—		—		—		—		—		3,386		3,386
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total C&I - revolving	$	—	$	—	$	—	$	—	$	—	$	—	$	296,869	$	296,869

C&I - other
Pass (Ratings 1 through 5)	$	496,445	$	279,412	$	127,803	$	87,054	$	59,675	$	105,184	$	—	$	1,155,573
Special Mention (Rating 6)		9,542		679		901		723		—		308		—		12,153
Substandard (Rating 7)		187		125		661		4,535		310		106		—		5,924
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total C&I - other	$	506,174	$	280,216	$	129,365	$	92,312	$	59,985	$	105,598	$	—	$	1,173,650

CRE - owner occupied
Pass (Ratings 1 through 5)	$	146,211	$	182,440	$	142,596	$	33,571	$	27,088	$	45,993	$	13,460	$	591,359
Special Mention (Rating 6)		6,190		—		6,379		484		—		1,346		269		14,668
Substandard (Rating 7)		3,750		171		16,336		1,396		1,197		490		—		23,340
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total CRE - owner occupied	$	156,151	$	182,611	$	165,311	$	35,451	$	28,285	$	47,829	$	13,729	$	629,367

CRE - non-owner occupied
Pass (Ratings 1 through 5)	$	310,163	$	221,953	$	173,478	$	89,337	$	56,898	$	40,923	$	7,510	$	900,262
Special Mention (Rating 6)		2,824		882		18,920		—		12,917		6,198		—		41,741
Substandard (Rating 7)		5,651		—		157		15,217		—		—		211		21,236
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total CRE - non-owner occupied	$	318,638	$	222,835	$	192,555	$	104,554	$	69,815	$	47,121	$	7,721	$	963,239

Construction and land development
Pass (Ratings 1 through 5)	$	479,016	$	330,434	$	240,778	$	31,607	$	30,300	$	—	$	29,647	$	1,141,782
Special Mention (Rating 6)		1,465		9,200		—		—		—		—		—		10,665
Substandard (Rating 7)		132		10,262		—		—		—		—		—		10,394
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total Construction and land development	$	480,613	$	349,896	$	240,778	$	31,607	$	30,300	$	—	$	29,647	$	1,162,841

Multi-family
Pass (Ratings 1 through 5)	$	237,839	$	254,056	$	224,920	$	134,378	$	99,695	$	7,875	$	2,227	$	960,990
Special Mention (Rating 6)		—		44		—		1,467		—		—		—		1,511
Substandard (Rating 7)		—		—		1,302		—		—		—		—		1,302
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total Multi-family	$	237,839	$	254,100	$	226,222	$	135,845	$	99,695	$	7,875	$	2,227	$	963,803

1-4 family real estate
Pass (Ratings 1 through 5)	$	61,953	$	57,731	$	33,737	$	12,687	$	5,813	$	6,002	$	5,855	$	183,778
Special Mention (Rating 6)		—		—		—		—		—		—		—		—
Substandard (Rating 7)		28		—		—		5		—		—		—		33
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total 1-4 family real estate	$	61,981	$	57,731	$	33,737	$	12,692	$	5,813	$	6,002	$	5,855	$	183,811

Consumer
Pass (Ratings 1 through 5)	$	511	$	801	$	493	$	122	$	254	$	621	$	10,226	$	13,028
Special Mention (Rating 6)		—		—		—		—		—		—		—		—
Substandard (Rating 7)		282		—		12		—		112		—		—		406
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total Consumer	$	793	$	801	$	505	$	122	$	366	$	621	$	10,226	$	13,434

Total	$	1,762,189	$	1,348,190	$	988,473	$	412,583	$	294,259	$	215,046	$	366,274	$	5,387,014

Note 4. Loans/Leases Receivable (continued)


	2022
	Term Loans
	Amortized Cost Basis by Origination Year												Revolving
													Loans
													Amortized
Delinquency Status *	2022		2021		2020		2019		2018		Prior		Cost Basis		Total

	(dollars in thousands)
C&I - other
Performing	$	170,180	$	69,694	$	25,540	$	8,066	$	1,804	$	79	$	—	$	275,363
Nonperforming		1,110		1,320		155		95		—		—		—		2,680
Total C&I - other	$	171,290	$	71,014	$	25,695	$	8,161	$	1,804	$	79	$	—	$	278,043

Construction and land development
Performing	$	28,785	$	360	$	10	$	3	$	62	$	—	$	—	$	29,220
Nonperforming		—		—		—		—		—		—		—		—
Total Construction and land development	$	28,785	$	360	$	10	$	3	$	62	$	—	$	—	$	29,220

Direct financing leases
Performing	$	14,578	$	5,172	$	5,700	$	4,398	$	1,536	$	370	$	—	$	31,754
Nonperforming		—		32		88		7		8		—		—		135
Total Direct financing leases	$	14,578	$	5,204	$	5,788	$	4,405	$	1,544	$	370	$	—	$	31,889

1-4 family real estate
Performing	$	69,094	$	92,762	$	75,153	$	17,089	$	11,381	$	48,136	$	90	$	313,705
Nonperforming		267		524		487		279		8		448		—		2,013
Total 1-4 family real estate	$	69,361	$	93,286	$	75,640	$	17,368	$	11,389	$	48,584	$	90	$	315,718

Consumer
Performing	$	14,685	$	3,844	$	3,717	$	1,123	$	1,140	$	1,325	$	70,974	$	96,808
Nonperforming		7		—		—		—		3		59		110		179
Total Consumer	$	14,692	$	3,844	$	3,717	$	1,123	$	1,143	$	1,384	$	71,084	$	96,987

Total	$	298,706	$	173,708	$	110,850	$	31,060	$	15,942	$	50,417	$	71,174	$	751,857

*Performing = loans/leases accruing and less than 90 days past due. Nonperforming = loans/leases on nonaccrual and accruing loans/leases that are greater than or equal to 90 days past due.

Note 4. Loans/Leases Receivable (continued)



	2021
	Term Loans
	Amortized Cost Basis by Origination Year
													Revolving
													Loans
Internally Assigned													Amortized
Risk Rating	2021		2020		2019		2018		2017		Prior		Cost Basis		Total

	(dollars in thousands)
C&I - revolving
Pass (Ratings 1 through 5)	$	—	$	—	$	—	$	—	$	—	$	—	$	245,212	$	245,212
Special Mention (Rating 6)		—		—		—		—		—		—		633		633
Substandard (Rating 7)		—		—		—		—		—		—		2,638		2,638
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total C&I - revolving	$	—	$	—	$	—	$	—	$	—	$	—	$	248,483	$	248,483

C&I - other
Pass (Ratings 1 through 5)	$	391,532	$	362,256	$	133,678	$	82,177	$	83,419	$	53,310	$	—	$	1,106,372
Special Mention (Rating 6)		3,580		373		349		—		336		2		—		4,640
Substandard (Rating 7)		506		2,366		7,138		396		55		46		—		10,507
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total C&I - other	$	395,618	$	364,995	$	141,165	$	82,573	$	83,810	$	53,358	$	—	$	1,121,519

CRE - owner occupied
Pass (Ratings 1 through 5)	$	118,014	$	143,045	$	47,660	$	30,523	$	17,038	$	46,185	$	11,477	$	413,942
Special Mention (Rating 6)		637		—		—		233		1,846		1,202		—		3,918
Substandard (Rating 7)		—		—		2,080		1,239		522		—		—		3,841
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total CRE - owner occupied	$	118,651	$	143,045	$	49,740	$	31,995	$	19,406	$	47,387	$	11,477	$	421,701

CRE - non-owner occupied
Pass (Ratings 1 through 5)	$	176,813	$	145,712	$	88,697	$	63,849	$	55,752	$	28,808	$	8,592	$	568,223
Special Mention (Rating 6)		7,295		20,881		1,802		12,230		5,494		5,580		—		53,282
Substandard (Rating 7)		1,105		6,297		15,563		1,087		943		—		—		24,995
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total CRE - non-owner occupied	$	185,213	$	172,890	$	106,062	$	77,166	$	62,189	$	34,388	$	8,592	$	646,500

Construction and land development
Pass (Ratings 1 through 5)	$	394,045	$	248,360	$	126,941	$	106,790	$	3,012	$	—	$	13,277	$	892,425
Special Mention (Rating 6)		—		—		—		—		—		—		—		—
Substandard (Rating 7)		10,362		—		—		—		—		—		—		10,362
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total Construction and land development	$	404,407	$	248,360	$	126,941	$	106,790	$	3,012	$	—	$	13,277	$	902,787

Multi-family
Pass (Ratings 1 through 5)	$	266,120	$	197,224	$	74,033	$	47,486	$	5,609	$	7,376	$	2,564	$	600,412
Special Mention (Rating 6)		—		—		—		—		—		—		—		—
Substandard (Rating 7)		—		—		—		—		—		—		—		—
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total Multi-family	$	266,120	$	197,224	$	74,033	$	47,486	$	5,609	$	7,376	$	2,564	$	600,412

1-4 family real estate
Pass (Ratings 1 through 5)	$	47,097	$	24,029	$	16,188	$	7,569	$	5,845	$	5,213	$	3,079	$	109,020
Special Mention (Rating 6)		37		—		—		—		—		—		—		37
Substandard (Rating 7)		—		178		—		437		201		—		—		816
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total 1-4 family real estate	$	47,134	$	24,207	$	16,188	$	8,006	$	6,046	$	5,213	$	3,079	$	109,873

Consumer
Pass (Ratings 1 through 5)	$	1,558	$	487	$	108	$	216	$	—	$	824	$	2,031	$	5,224
Special Mention (Rating 6)		—		—		—		—		—		—		—		—
Substandard (Rating 7)		—		—		—		137		—		—		—		137
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total Consumer	$	1,558	$	487	$	108	$	353	$	—	$	824	$	2,031	$	5,361

Total	$	1,418,701	$	1,151,208	$	514,237	$	354,369	$	180,072	$	148,546	$	289,503	$	4,056,636

Note 4. Loans/Leases Receivable (continued)




	2021
	Term Loans
	Amortized Cost Basis by Origination Year												Revolving
													Loans
													Amortized
Delinquency Status *	2021		2020		2019		2018		2017		Prior		Cost Basis		Total

	(dollars in thousands)
C&I - other
Performing	$	117,163	$	54,261	$	33,390	$	14,274	$	4,200	$	455	$	—	$	223,743
Nonperforming		95		177		644		368		42		14		—		1,340
Total C&I - other	$	117,258	$	54,438	$	34,034	$	14,642	$	4,242	$	469	$	—	$	225,083

Direct financing leases
Performing	$	6,690	$	12,130	$	11,638	$	9,235	$	3,695	$	956	$	—	$	44,344
Nonperforming		—		732		—		52		18		45		—		847
Total Direct financing leases	$	6,690	$	12,862	$	11,638	$	9,287	$	3,713	$	1,001	$	—	$	45,191

Construction and land development
Performing	$	12,857	$	2,080	$	—	$	494	$	—	$	—	$	280	$	15,711
Nonperforming		—		—		—		—		73		—		—		73
Total Construction and land development	$	12,857	$	2,080	$	—	$	494	$	73	$	—	$	280	$	15,784

1-4 family real estate
Performing	$	104,005	$	78,713	$	19,001	$	10,784	$	10,533	$	43,976	$	68	$	267,080
Nonperforming		—		—		—		106		—		302		—		408
Total 1-4 family real estate	$	104,005	$	78,713	$	19,001	$	10,890	$	10,533	$	44,278	$	68	$	267,488

Consumer
Performing	$	4,891	$	4,020	$	2,114	$	1,660	$	593	$	1,230	$	55,411	$	69,919
Nonperforming		—		—		15		—		15		1		—		31
Total Consumer	$	4,891	$	4,020	$	2,129	$	1,660	$	608	$	1,231	$	55,411	$	69,950

Total	$	245,701	$	152,113	$	66,802	$	36,973	$	19,169	$	46,979	$	55,759	$	623,496

Note 4. Loans/Leases Receivable (continued)

TDRs totaled $331 thousand and $494 thousand as of December 31, 2022 and 2021, respectively.

For each class of financing receivable, the following presents the number and recorded investment of TDRs, by type of concession, that were restructured during the years ended December 31, 2022 and 2021. The difference between the pre-modification recorded investment and the post-modification recorded investment would be any partial charge-offs at the time of restructuring.


	2022
		Pre-		Post-
		Modification		Modification
	Number of	Recorded		Recorded		Specific
Classes of Loans/Leases	Loans / Leases	Investment		Investment		Allowance

	(dollars in thousands)
CONCESSION - Significant Payment Delay
Direct Financing Leases	3	$	232	$	232	$	—

TOTAL	3	$	232	$	232	$	—


	2021
		Pre-		Post-
		Modification		Modification
	Number of	Recorded		Recorded		Specific
Classes of Loans/Leases	Loans / Leases	Investment		Investment		Allowance

	(dollars in thousands)
CONCESSION - Extension of Maturity
1-4 family real estate	1	$	2,532	$	2,532	$	182

CONCESSION - Interest Rate Adjusted Below Market
1-4 family real estate	1	$	54	$	54	$	6
Consumer	1		13		13		1
	2	$	67	$	67	$	7

TOTAL	3	$	2,599	$	2,599	$	189

Of the loans restructured reported above, none were on nonaccrual as of December 31, 2022 and one with a post-modification recorded investment totaling $54 thousand was on nonaccrual as of December 31, 2021.

For the year ended December 31, 2022 and 2021, the Company did not have any TDRs that redefaulted within 12 months subsequent to restructure, where default is defined as delinquency of 90 days or more and/or placement on nonaccrual status. The Company did not have any TDRs that were restructured and charged off in 2022 or 2021.

Changes in the ACL for OBS exposures for the year ended December 31, 2022 and 2021 is presented as follows:


	For the Year Ended
	December 31, 2022		December 31, 2021

	(dollars in thousands)

Balance, beginning	$	6,886	$	—
Impact of adopting ASU 2016-13		—		9,117
Provisions (credited) to expense		(1,334)		(2,231)
Balance, ending	$	5,552	$	6,886

Loans are made in the normal course of business to directors, executive officers, and their related interests. All such loans, in the opinion of management, were made in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not related to the lenders and did not involve more than the normal risk of collectability or present other unfavorable

Note 4. Loans/Leases Receivable (continued)

features. An analysis of the changes in the aggregate committed amount of loans to insiders greater than or equal to $60,000 during the years ended December 31, 2022, 2021, and 2020, is as follows:


	2022		2021		2020

	(dollars in thousands)

Balance, beginning	$	100,898	$	100,361	$	112,830
Net increase (decrease) due to change in related parties		3,496		(18,832)		(1,601)
Advances		51,683		42,817		43,238
Repayments		(42,877)		(23,448)		(54,106)
Balance, ending	$	113,200	$	100,898	$	100,361

The Company’s loan portfolio includes a geographic concentration in the Midwest. Additionally, the loan portfolio includes a concentration of loans in certain industries as of December 31, 2022 and 2021 as follows:


	2022				2021
			Percentage of				Percentage of
			Total				Total
Industry Name	Balance		Loans/Leases		Balance		Loans/Leases

	(dollars in thousands)

Lessors of Residential Buildings*	$	2,168,431	35	%	$	1,706,092	36	%
Lessors of Non-Residential Buildings		558,719	9	%		586,672	13	%

* Includes loans on LIHTC projects