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Loans and Leases and Allowance for Credit Losses

9 Months Ended

Sep. 30, 2023

Loans and Leases and Allowance for Credit Losses

Note 5. Loans and Leases and Allowance for Credit Losses

Portfolio Segmentation:

Major categories of loans and leases are summarized as follows (in thousands):


	September 30,		December 31,
	2023		2022
Commercial real estate	$	1,667,176	$	1,627,761
Consumer real estate		638,518		587,977
Construction and land development		373,068		402,501
Commercial and industrial		617,115		551,867
Leases		68,538		67,427
Consumer and other		14,584		16,094
Total loans and leases		3,378,999		3,253,627
Less: Allowance for credit losses		(33,687)		(23,334)
Loans and leases, net	$	3,345,312	$	3,230,293

The loan and lease portfolio is disaggregated into segments. There are six loan and lease portfolio segments that include commercial real estate, consumer real estate, construction and land development, commercial and industrial, leases, and consumer and other.

The following describe risk characteristics relevant to each of the portfolio segments:

Commercial Real Estate: Commercial real estate loans include owner-occupied commercial real estate loans and loans secured by income-producing properties. Owner-occupied commercial real estate loans to operating businesses are long-term financing of land and buildings. These loans are repaid by cash flow generated from the business operation. Real estate loans for income-producing properties such as apartment buildings, office and industrial buildings, and retail shopping centers are repaid from rent income derived from the properties. Loans within this portfolio segment are particularly sensitive to the valuation of real estate.

Consumer Real Estate: Consumer real estate loans include real estate loans secured by first liens, second liens, or open end real estate loans, such as home equity lines. These are repaid by various means such as a borrower’s income, sale of

the property, or rental income derived from the property. Loans within this portfolio segment are particularly sensitive to the valuation of real estate.

Construction and Land Development: Loans for real estate construction and development are repaid through cash flow related to the operations, sale or refinance of the underlying property. This portfolio segment includes extensions of credit to real estate developers or investors where repayment is dependent on the sale of the real estate or income generated from the real estate collateral. Loans within this portfolio segment are particularly sensitive to the valuation of real estate.

Commercial and Industrial: The commercial and industrial loan portfolio segment includes commercial and financial loans. These loans include those loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases, or expansion projects. Loans are repaid by business cash flows. Collection risk in this portfolio is driven by the creditworthiness of the underlying borrower, particularly cash flows from the customers’ business operations.

Leases: The lease portfolio segment includes leases to small and mid-size companies for equipment financing leases. These leases are secured by a secured interest in the equipment being leased.

Consumer and Other: The consumer loan portfolio segment includes direct consumer installment loans, overdrafts and other revolving credit loans, and educational loans. Loans in this portfolio are sensitive to unemployment and other key consumer economic measures.

The Bank occasionally enters into loan participation agreements with other banks in the ordinary course of business to diversify credit risk. For certain sold participation loans, the Bank has retained effective control of the loans, typically by restricting the participating institutions from pledging or selling their share of the loan without permission from the Bank. GAAP requires the participated portion of these loans to be recorded as secured borrowings. The participated portions of these loans are included in the Commercial Real Estate totals above with a corresponding liability reflected in other borrowings. At September 30, 2023 and December 31, 2022, the balance of such loans totaled $0 and $24.6 million, respectively.

The following tables detail the changes in the allowance for credit losses by loan and lease classification (in thousands):


	Three Months Ended September 30, 2023
			Consumer		Construction		Commercial
	Commercial		Real		and Land		and				Consumer
	Real Estate		Estate		Development		Industrial		Leases		and Other		Total
Beginning balance	$	14,314	$	6,748	$	5,446	$	5,504	$	586	$	149	$	32,747
Charged-off loans and leases		—		(9)		—		(179)		(143)		(86)		(417)
Recoveries of charge-offs		2		4		—		48		—		19		73
Provision charged to expense ⁽¹⁾		691		413		(369)		307		201		41		1,284
Ending balance	$	15,007	$	7,156	$	5,077	$	5,680	$	644	$	123	$	33,687


	Three Months Ended September 30, 2022
			Consumer		Construction		Commercial
	Commercial		Real		and Land		and				Consumer
	Real Estate		Estate		Development		Industrial		Leases		and Other		Total
Beginning balance	$	10,600	$	3,835	$	2,904	$	3,659	$	807	$	133	$	21,938
Charged-off loans and leases		—		—		—		(51)		—		(180)		(231)
Recoveries of charge-offs		—		7		—		19		29		33		88
Provision charged to expense		(21)		166		272		208		198		151		974
Ending balance	$	10,579	$	4,008	$	3,176	$	3,835	$	1,034	$	137	$	22,769


	Nine Months Ended September 30, 2023
			Consumer		Construction		Commercial
	Commercial		Real		and Land		and				Consumer
	Real Estate		Estate		Development		Industrial		Leases		and Other		Total
Beginning balance	$	10,821	$	4,028	$	3,059	$	3,997	$	1,293	$	136	$	23,334
Impact of adopting ASU 2016-13		879		1,952		2,145		1,451		(683)		13		5,757
PCD gross up		2,652		166		25		27		28		—		2,898
Charged-off loans and leases		—		(9)		—		(387)		(211)		(332)		(939)
Recoveries of charge-offs		5		13		25		153		—		187		383
Provision charged to expense ⁽¹⁾		650		1,006		(177)		439		217		119		2,254
Ending balance	$	15,007	$	7,156	$	5,077	$	5,680	$	644	$	123	$	33,687


	Nine Months Ended September 30, 2022
			Consumer		Construction		Commercial
	Commercial		Real		and Land		and				Consumer
	Real Estate		Estate		Development		Industrial		Leases		and Other		Total
Beginning balance	$	9,781	$	3,454	$	1,882	$	3,781	$	330	$	124	$	19,352
Charged-off loans and leases		—		(33)		—		(240)		(108)		(482)		(863)
Recoveries of charge-offs		4		561		—		162		192		131		1,050
Provision charged to expense		794		26		1,294		132		620		364		3,230
Ending balance	$	10,579	$	4,008	$	3,176	$	3,835	$	1,034	$	137	$	22,769

(1)

In the provision charged to expense there was a release of $489 thousand and $796 thousand for unfunded commitments through the provision for credit losses not reflected in the three and nine months ended September 30, 2023.

The following tables detail the allowance for credit losses and recorded investment in loans by loan classification and by impairment evaluation method as of December 31, 2022, as determined in accordance with ASC 310 prior to the adoption of ASU 2016-13 (in thousands):


					Construction		Commercial				Consumer
	Commercial		Consumer		and Land		and				and
	Real Estate		Real Estate		Development		Industrial		Leases		Other		Total
December 31, 2022:
Performing loans and leases	$	10,815	$	3,913	$	2,674	$	3,997	$	1,293	$	136	$	22,828
Impaired loans and leases		—		—		385		—		—		—		385
		10,815		3,913		3,059		3,997		1,293		136		23,213
PCI loans and leases		6		115		—		—		—		—		121
Total allowance for loans and leases	$	10,821	$	4,028	$	3,059	$	3,997	$	1,293	$	136	$	23,334


					Construction		Commercial
	Commercial		Consumer		and Land		and				Consumer
	Real Estate		Real Estate		Development		Industrial		Leases		and Other		Total
December 31, 2022:
Performing loans and leases	$	1,611,815	$	578,342	$	400,114	$	549,974	$	66,459	$	16,091	$	3,222,795
Impaired loans and leases		—		1,283		858		—		—		—		2,141
		1,611,815		579,625		400,972		549,974		66,459		16,091		3,224,936
PCI loans and leases		15,946		8,352		1,529		1,893		968		3		28,691
Total loans and leases	$	1,627,761	$	587,977	$	402,501	$	551,867	$	67,427	$	16,094	$	3,253,627

We maintain the allowance for credit losses at a level that we deem appropriate to adequately cover the expected credit loss in the loan and lease portfolio. Our provision for loan and lease losses for the three and nine months ended September 30, 2023, is $1.3 million and $2.3 million, respectively, and $974 thousand and $3.2 million, during the three and nine months ended September 30, 2022, respectively. As of September 30, 2023, and December 31, 2022, our allowance for credit losses was $33.7 million and $23.3 million, respectively, which we deemed to be adequate at each of the respective dates. Our allowance for credit losses as a percentage of total loans and leases was 1.00% at September 30, 2023, and 0.72% at December 31, 2022.

A description of the general characteristics of the risk grades used by the Company is as follows:

Pass: Loans and leases in this risk category involve borrowers of acceptable-to-strong credit quality and risk who have the apparent ability to satisfy their loan and lease obligations. Loans and leases in this risk grade would possess sufficient mitigating factors, such as adequate collateral or strong guarantors possessing the capacity to repay the debt if required, for any weakness that may exist.

Watch: Loans and leases in this risk category involve borrowers that exhibit characteristics, or are operating under conditions that, if not successfully mitigated as planned, have a reasonable risk of resulting in a downgrade within the next six to twelve months. Loans and leases may remain in this risk category for six months and then are either upgraded or downgraded upon subsequent evaluation.

Special Mention: Loans and leases in this risk grade are the equivalent of the regulatory definition of “Other Assets Especially Mentioned” classification. Loans and leases in this category possess some credit deficiency or potential weakness, which requires a high level of management attention. Potential weaknesses include declining trends in operating earnings and cash flows and /or reliance on the secondary source of repayment. If left uncorrected, these potential weaknesses may result in noticeable deterioration of the repayment prospects for the asset or in the Company’s credit position.

Substandard: Loans and leases in this risk grade are inadequately protected by the borrower’s current financial condition and payment capability or of the collateral pledged, if any. Loans and leases so classified have a well-defined weakness or

weaknesses that jeopardize the orderly repayment of debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans and leases in this risk grade have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or orderly repayment in full, on the basis of current existing facts, conditions and values, highly questionable and improbable. Possibility of loss is extremely high, but because of certain important and reasonably specific factors that may work to the advantage and strengthening of the exposure, its classification as an estimated loss is deferred until its more exact status may be determined.

Uncollectible: Loans and leases in this risk grade are considered to be non-collectible and of such little value that their continuance as bankable assets is not warranted. This does not mean the loan or lease has absolutely no recovery value, but rather it is neither practical nor desirable to defer writing off the loan or lease, even though partial recovery may be obtained in the future. Charge-offs against the allowance for credit losses are taken in the period in which the loan or lease becomes uncollectible. Consequently, the Company typically does not maintain a recorded investment in loans or leases within this category.

The Company evaluates the loan risk grading system definitions and allowance for credit loss methodology on an ongoing basis. There were no changes to these subsequent to adoption ASU 2016-13 on January 1, 2023.

The following tables outline the amount of each loan and lease classification and the amount categorized into each risk rating based on year of origination (in thousands):


	September 30, 2023
	Loans Amortized Cost Basis by Origination Year
															Revolving
															Loans
													Revolving		Converted
	2023		2022		2021		2020		2019		Prior		Loans		to Term		Total
Commercial real estate
Pass	$	168,217	$	553,613	$	436,468	$	187,188	$	141,248	$	118,422	$	14,878	$	8,163	$	1,628,197
Watch		20,665		1,269		2,418		2,652		3,848		267		-		-		31,119
Special mention		-		3,234		-		-		-		-		-		-		3,234
Substandard		968		-		3,145		51		-		462		-		-		4,626
Doubtful		-		-		-		-		-		-		-		-		-
Total commercial real estate		189,850		558,116		442,031		189,891		145,096		119,151		14,878		8,163		1,667,176
YTD gross charge-offs		-		-		-		-		-		-		-		-		-

Consumer real estate
Pass		94,979		179,838		100,852		55,222		34,531		53,597		109,227		3,032		631,278
Watch		171		71		319		289		-		108		1,714		-		2,672
Special mention		-		-		-		-		-		54		-		-		54
Substandard		198		905		-		-		164		2,908		339		-		4,514
Doubtful		-		-		-		-		-		-		-		-		-
Total consumer real estate		95,348		180,814		101,171		55,511		34,695		56,667		111,280		3,032		638,518
YTD gross charge-offs		-		-		-		-		-		(9)		-		-		(9)

Construction and land development
Pass		95,692		166,355		50,591		4,188		5,162		7,265		35,908		1,797		366,958
Watch		4,194		399		451		-		-		2		-		-		5,046
Special mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		36		620		-		408		-		-		1,064
Doubtful		-		-		-		-		-		-		-		-		-
Total construction and land development		99,886		166,754		51,078		4,808		5,162		7,675		35,908		1,797		373,068
YTD gross charge-offs		-		-		-		-		-		-		-		-		-

Commercial and industrial
Pass		137,793		174,721		67,809		24,379		11,313		26,674		164,939		8,006		615,634
Watch		-		631		214		129		75		75		138		-		1,262
Special mention		-		-		-		-		-		-		-		13		13
Substandard		206		-		-		-		-		-		-		-		206
Doubtful		-		-		-		-		-		-		-		-		-
Total commercial and industrial		137,999		175,352		68,023		24,508		11,388		26,749		165,077		8,019		617,115
YTD gross charge-offs		-		(154)		(50)		(183)		-		-		-		-		(387)

Leases
Pass		23,304		29,453		10,074		4,459		933		315		-		-		68,538
Watch		-		-		-		-		-		-		-		-		-
Special mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total leases		23,304		29,453		10,074		4,459		933		315		-		-		68,538
YTD gross charge-offs		(27)		(163)		(9)		-		(12)		-		-		-		(211)

Consumer and other
Pass		5,539		2,314		1,060		671		148		229		4,538		73		14,572
Watch		-		-		-		-		12		-		-		-		12
Special mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total consumer and other		5,539		2,314		1,060		671		160		229		4,538		73		14,584
YTD gross charge-offs		(22)		(115)		(62)		(48)		(26)		(59)		-		-		(332)

Total loans
Pass		525,524		1,106,294		666,854		276,107		193,335		206,502		329,490		21,071		3,325,177
Watch		25,030		2,370		3,402		3,070		3,935		452		1,852		-		40,111
Special mention		-		3,234		-		-		-		54		-		13		3,301
Substandard		1,372		905		3,181		671		164		3,778		339		-		10,410
Doubtful		-		-		-		-		-		-		-		-		-
Total loans	$	551,926	$	1,112,803	$	673,437	$	279,848	$	197,434	$	210,786	$	331,681	$	21,084	$	3,378,999
Total YTD gross charge-offs	$	(49)	$	(432)	$	(121)	$	(231)	$	(38)	$	(68)	$	-	$	-	$	(939)

The following tables outline the amount of each loan and lease classification and the amount categorized into each risk rating as of December 31, 2022, prior to the adoption of ASU 2016-13 (in thousands):


	December 31, 2022
					Construction		Commercial
	Commercial		Consumer		and Land		and				Consumer
Non PCI Loans and Leases:	Real Estate		Real Estate		Development		Industrial		Leases		and Other		Total
Pass	$	1,579,387	$	576,428	$	399,846	$	545,210	$	66,459	$	16,057	$	3,183,387
Watch		29,810		1,496		224		4,523		—		19		36,072
Special mention		2,539		35		—		61		—		—		2,635
Substandard		79		1,666		902		180		—		15		2,842
Doubtful		—		—		—		—		—		—		—
Total		1,611,815		579,625		400,972		549,974		66,459		16,091		3,224,936

PCI Loans and Leases:
Pass		11,924		6,927		1,054		1,893		968		3		22,769
Watch		1,439		188		46		—		—		—		1,673
Special mention		11		54		—		—		—		—		65
Substandard		2,572		1,183		429		—		—		—		4,184
Doubtful		—		—		—		—		—		—		—
Total		15,946		8,352		1,529		1,893		968		3		28,691
Total loans and leases	$	1,627,761	$	587,977	$	402,501	$	551,867	$	67,427	$	16,094	$	3,253,627

Past Due Loans and Leases:

A loan or lease is considered past due if any required principal and interest payments have not been received as of the date such payments were required to be made under the terms of the loan or lease agreement. Generally, management places a loan or lease on nonaccrual when there is a clear indicator that the borrower’s cash flow may not be sufficient to meet payments as they become due, which is generally when a loan or lease is 90 days past due.

The following tables present an aging analysis of our loan and lease portfolio (in thousands):


	September 30, 2023
					90 Days
	30-59 Days		60-89 Days		or More		Total		Loans Not		Total
	Past Due		Past Due		Past Due		Past Due		Past Due		Loans
Commercial real estate	$	862	$	—	$	—	$	862	$	1,666,314	$	1,667,176
Consumer real estate		706		401		34		1,141		637,377		638,518
Construction and land development		110		408		—		518		372,550		373,068
Commercial and industrial		1,384		945		98		2,427		614,688		617,115
Leases		118		—		—		118		68,420		68,538
Consumer and other		95		—		97		192		14,392		14,584
Total	$	3,275	$	1,754	$	229	$	5,258	$	3,373,741	$	3,378,999


	December 31, 2022
					90 Days
	30-59 Days		60-89 Days		or More		Total		Loans Not		Total
	Past Due		Past Due		Past Due		Past Due		Past Due		Loans
Commercial real estate	$	54	$	—	$	—	$	54	$	1,627,707		1,627,761
Consumer real estate		594		—		—		594		587,383		587,977
Construction and land development		—		—		—		—		402,501		402,501
Commercial and industrial		185		18		—		203		551,664		551,867
Leases		1,024		84		143		1,251		66,176		67,427
Consumer and other		103		4		—		107		15,987		16,094
Total	$	1,960	$	106	$	143	$	2,209	$	3,251,418	$	3,253,627

The table below presents the amortized cost basis of loans on nonaccrual status and loans past due 90 or more days and still accruing interest at September 30, 2023 and December 31, 2022. Also presented is the balance of loans on nonaccrual status at September 30, 2023 for which there was no related allowance for credit losses recorded (in thousands):


	September 30, 2023						December 31, 2022
	Total		Nonaccrual		Loans Past Due		Total		Loans Past Due
	Nonaccrual		With No Allowance		Over 90 Days		Nonaccrual		Over 90 Days
	Loans		for Credit Losses		Still Accruing		Loans		Still Accruing
Commercial real estate	$	741	$	—	$	—	$	—	$	—
Consumer real estate		2,064		1,154		34		1,665		—
Construction and land development		620		—		—		920		—
Commercial and industrial		314		—		98		180		—
Leases		195		—		—		28		143
Consumer and other		—		—		97		15		—
Total	$	3,934	$	1,154	$	229	$	2,808	$	143

The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses (in thousands):


	September 30, 2023
	Real Estate		Other		Total
Commercial real estate	$	3,836	$	—	$	3,836
Consumer real estate		2,434		—		2,434
Construction and land development		1,411		—		1,411
Commercial and industrial		—		—		—
Leases		—		—		—
Consumer and other		—		—		—
Total	$	7,681	$	—	$	7,681

Impaired Loans and Leases:

The following table presents impaired loans at December 31, 2022, as determined under ASC 310 prior to the adoption of ASU 2016-13. A loan or lease held for investment is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due (both principal and interest) according to the terms of the loan or lease agreement. Presented are the recorded investment, unpaid principal balance and related allowance of impaired loans at December 31, 2022, by loan classification (in thousands):


	December 31, 2022
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
Impaired loans and leases without a valuation allowance:
Commercial real estate	$	—	$	—	$	—
Consumer real estate		1,283		1,282		—
Construction and land development		—		—		—
Commercial and industrial		—		—		—
Leases		—		—		—
Consumer and other		—		—		—
		1,283		1,282		—
Impaired loans and leases with a valuation allowance:
Commercial real estate		—		—		—
Consumer real estate		—		—		—
Construction and land development		858		858		385
Commercial and industrial		—		—		—
Leases		—		—		—
Consumer and other		—		—		—
		858		858		385
PCI loans and leases:
Commercial real estate		500		580		6
Consumer real estate		684		646		115
Construction and land development		—		—		—
Commercial and industrial		—		—		—
Leases		—		—		—
Consumer and other		—		—		—
		1,184		1,226		121
Total impaired loans and leases	$	3,325	$	3,366	$	506

The following table details the average recorded investment and the amount of interest income recognized on a cash basis for the three and nine months ended September 30, 2022, respectively, of impaired loans by loan classification as determined under ASC 310 prior to the adoption of ASU 2016-13 (in thousands):


	Three Months Ended September 30, 2022
	Average		Interest
	Recorded		Income
	Investment		Recognized
Impaired loans and leases without a valuation allowance:
Commercial real estate	$	304	$	—
Consumer real estate		1,742		72
Construction and land development		—		—
Commercial and industrial		—		—
Leases		—		—
Consumer and other		—		—
		2,046		72
Impaired loans and leases with a valuation allowance:
Commercial real estate		—		—
Consumer real estate		—		—
Construction and land development		858		—
Commercial and industrial		—		—
Leases		—		—
Consumer and other		—		—
		858		—
PCI loans and leases:
Commercial real estate		525		11
Consumer real estate		880		12
Construction and land development		—		—
Commercial and industrial		—		—
Leases		—		—
Consumer and other		—		—
		1,405		23
Total impaired loans and leases	$	4,309	$	95


	Nine Months Ended September 30, 2022
	Average		Interest
	Recorded		Income
	Investment		Recognized
Impaired loans and leases without a valuation allowance:
Commercial real estate	$	152	$	—
Consumer real estate		1,839		92
Construction and land development		—		—
Commercial and industrial		—		—
Leases		—		—
Consumer and other		—		—
		1,991		92
Impaired loans and leases with a valuation allowance:
Commercial real estate		429		—
Consumer real estate		87		—
Construction and land development		429		—
Commercial and industrial		32		—
Leases		—		—
Consumer and other		—		—
		977		—
PCI loans and leases:
Commercial real estate		765		46
Consumer real estate		879		40
Construction and land development		—		—
Commercial and industrial		—		—
Leases		—		—
Consumer and other		2		—
		1,646		86
Total impaired loans and leases	$	4,614	$	178

Loan Modifications to Borrowers Experiencing Financial Difficulty:

The Company adopted ASU 2022-02, “Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”) effective January 1, 2023. The amendments in ASU 2022-02 eliminated the recognition and measure of troubled debt restructurings and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty.

The table below shows the amortized cost of loans and leases made to borrowers experiencing financial difficulty that were modified during the three and nine months ended September 30, 2023 (dollars in thousands):


					Payment Delay				Total Class
	Payment		Term		and Term				of Financing
Three months ended September 30, 2023	Delay		Extension		Extension		Total		Receivable
Commercial real estate	$	—	$	528	$	—	$	528	0.03	%
Consumer real estate		—		514		—		514	0.08
Construction and land development		—		748		—		748	0.20
Commercial and industrial		—		—		—		—	-
Leases		—		—		—		—	-
Consumer and other		—		—		—		—	-
Total	$	—	$	1,790	$	—	$	1,790	0.05	%


Nine months ended September 30, 2023
Commercial real estate	$	403	$	566	$	—	$	969	0.06	%
Consumer real estate		—		514		—		514	0.08
Construction and land development		—		748		—		748	0.20
Commercial and industrial		63		—		153		216	0.04
Leases		—		—		—		—	-
Consumer and other		—		—		—		—	-
Total	$	466	$	1,828	$	153	$	2,447	0.07	%

The following table summarizes the financial impacts of loan modifications made to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2023 (dollars in thousands):


	Weighted-Average
	Term		Weighted-Average
	Extension		Total Payment
Three months ended September 30, 2023	(in months)		Delay
Commercial real estate		12	$	—
Consumer real estate		20		—
Construction and land development		9		—
Commercial and industrial		—		—
Leases		—		—
Consumer and other		—		—


Nine months ended September 30, 2023
Commercial real estate		23	$	23
Consumer real estate		15		—
Construction and land development		9		—
Commercial and industrial		30		7
Leases		—		—
Consumer and other		—		—

No loan modifications made to borrowers experiencing financial difficulty, defaulted during the three and nine months ended September 30, 2023.

The table below shows an age analysis of loans and leases made to borrowers experiencing financial difficulty that were modified on or after January 1, 2023, that date the Company adopted ASU 2022-02 (in thousands):


	September 30, 2023
					90 Days
			30-89 Days		or More
	Current		Past Due		Past Due		Nonaccrual		Total
Commercial real estate	$	—	$	—	$	—	$	968	$	968
Consumer real estate		139		—		—		376		515
Construction and land development		288		—		—		460		748
Commercial and industrial		—		—		—		216		216
Leases		—		—		—		—		—
Consumer and other		—		—		—		—		—
Total	$	427	$	—	$	—	$	2,020	$	2,447

As of December 31, 2022, prior to the adoption ASU 2022-02, management had approximately $101 thousand that meet the criteria of trouble debt restructured (“TDR”), none of which were on nonaccrual.

There were no loans modified as a TDR during the nine months ended September 30, 2022.

Foreclosure Proceedings and Balances:

As of September 30, 2023, there were two residential real estate properties totaling $304 thousand secured by real estate included in other real estate owned and there were no residential real estate loans in the process of foreclosure.