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Note 3 - Loans and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2023

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

3. LOANS AND ALLOWANCE FOR CREDIT LOSSES

Our total loans at June 30, 2023 were $4.05 billion compared to $3.92 billion at December 31, 2022, an increase of $135 million, or 3.5%. The components of our loan portfolio disaggregated by class of loan within the loan portfolio segments at June 30, 2023 and December 31, 2022, and the percentage change in loans from the end of 2022 to the end of the second quarter of 2023, are as follows:

											Percent
	June 30, 2023					December 31, 2022					Increase
	Balance		%			Balance		%			(Decrease)

Commercial:
Commercial and industrial	$	1,212,196,000		29.9	%	$	1,185,083,000		30.3	%		2.3	%
Vacant land, land development, and residential construction		72,682,000		1.8			61,873,000		1.6			17.5
Real estate – owner occupied		659,201,000		16.3			639,192,000		16.3			3.1
Real estate – non-owner occupied *		957,221,000		23.6			979,214,000		25.0			(2.2	)
Real estate – multi-family and residential rental *		287,285,000		7.1			266,468,000		6.8			7.8
Total commercial		3,188,585,000		78.7			3,131,830,000		80.0			1.8

Retail:
1-4 family mortgages		833,198,000		20.6			755,036,000		19.3			10.4
Other consumer loans		30,060,000		0.7			29,753,000		0.7			1.0
Total retail		863,258,000		21.3			784,789,000		20.0			10.0

Total loans	$	4,051,843,000		100.0	%	$	3,916,619,000		100.0	%		3.5	%

(*)

We have made certain reclassifications of how multi-family construction loans are disaggregated by loan segment. The table above reflects an increase of $54.5 million in Real Estate – Multi-Family and Residential Rental loans and a corresponding decrease in Real Estate – Non-Owner Occupied loans as of December 31, 2022. All the tables that follow have been adjusted to reflect the reclassifications as of the applicable dates.

Nonperforming loans as of June 30, 2023 and December 31, 2022 were as follows:

	June 30,		December 31,
	2023		2022

Loans past due 90 days or more still accruing interest	$	0	$	0
Nonaccrual loans		2,099,000		7,728,000

Total nonperforming loans	$	2,099,000	$	7,728,000

The recorded principal balance of nonperforming loans was as follows:

	June 30,		December 31,
	2023		2022
Commercial:
Commercial and industrial	$	249,000	$	6,024,000
Vacant land, land development, and residential construction		0		0
Real estate – owner occupied		116,000		248,000
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		365,000		6,272,000

Retail:
1-4 family mortgages		1,734,000		1,456,000
Other consumer loans		0		0
Total retail		1,734,000		1,456,000

Total nonperforming loans	$	2,099,000	$	7,728,000

An age analysis of past due loans is as follows as of June 30, 2023:

	30 – 59 Days Past Due		60 – 89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due		Current		Total Loans		Recorded Balance > 89 Days and Accruing

Commercial:
Commercial and industrial	$	0	$	0	$	249,000	$	249,000	$	1,211,947,000	$	1,212,196,000	$	0
Vacant land, land development, and residential construction		0		0		0		0		72,682,000		72,682,000		0
Real estate – owner occupied		0		0		116,000		116,000		659,085,000		659,201,000		0
Real estate – non- owner occupied		0		0		0		0		957,221,000		957,221,000		0
Real estate – multi-family and residential rental		0		0		0		0		287,285,000		287,285,000		0
Total commercial		0		0		365,000		365,000		3,188,220,000		3,188,585,000		0

Retail:
1-4 family mortgages		602,000		83,000		184,000		869,000		832,329,000		833,198,000		0
Other consumer loans		4,000		4,000		0		8,000		30,052,000		30,060,000		0
Total retail		606,000		87,000		184,000		877,000		862,381,000		863,258,000		0

Total past due loans	$	606,000	$	87,000	$	549,000	$	1,242,000	$	4,050,601,000	$	4,051,843,000	$	0

An age analysis of past due loans is as follows as of December 31, 2022:

	30 – 59 Days Past Due		60 – 89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due		Current		Total Loans		Recorded Balance > 89 Days and Accruing

Commercial:
Commercial and industrial	$	0	$	5,705,000	$	249,000	$	5,954,000	$	1,179,129,000	$	1,185,083,000	$	0
Vacant land, land development, and residential construction		0		0		0		0		61,873,000		61,873,000		0
Real estate – owner occupied		0		248,000		0		248,000		638,944,000		639,192,000		0
Real estate – non-owner occupied		0		0		0		0		979,214,000		979,214,000		0
Real estate – multi-family and residential rental		0		0		0		0		266,468,000		266,468,000		0
Total commercial		0		5,953,000		249,000		6,202,000		3,125,628,000		3,131,830,000		0

Retail:
1-4 family mortgages		1,334,000		88,000		116,000		1,538,000		753,498,000		755,036,000		0
Other consumer loans		15,000		1,000		0		16,000		29,737,000		29,753,000		0
Total retail		1,349,000		89,000		116,000		1,554,000		783,235,000		784,789,000		0

Total past due loans	$	1,349,000	$	6,042,000	$	365,000	$	7,756,000	$	3,908,863,000	$	3,916,619,000	$	0

Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. Identified problem loans, which exhibit characteristics (financial or otherwise) that could cause the loans to become nonperforming or require restructuring in the future, are included on an internal watch list. Senior management and the Board of Directors review this list regularly. Fair value estimates of collateral on distressed lending relationships, as well as on foreclosed and repossessed assets, are reviewed periodically. We also have a process in place to monitor whether value estimates at each quarter-end are reflective of current market conditions. Our credit policies establish criteria for obtaining appraisals and determining internal value estimates. We may also adjust outside and internal valuations based on identifiable trends within our markets, such as recent sales of similar properties or assets, listing prices and offers received. In addition, we may discount certain appraised and internal value estimates to address distressed market conditions. Under CECL for collateral dependent loans in instances where the borrower is experiencing financial difficulties, we adopted the practical expedient to measure the allowance based on the fair value of collateral. The allowance is calculated on an individual loan basis based on the shortfall between the fair value of the loan’s collateral and the recorded principal balance. If the fair value of the collateral exceeds the recorded principal balance, no allowance is required. Collateral dependent loans, representing the entire amount of loans on nonaccrual, totaled $2.1 million and $7.7 million as of June 30, 2023 and December 31, 2022, respectively.

Nonaccrual loans as of June 30, 2023 were as follows:

	Amortized		Related
	Cost		Allowance
With no allowance recorded:
Commercial:
Commercial and industrial	$	249,000	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		249,000		0

Retail:
1-4 family mortgages		1,315,000		0
Other consumer loans		0		0
Total retail		1,315,000		0

Total with no allowance recorded	$	1,564,000	$	0

With an allowance recorded:
Commercial:
Commercial and industrial	$	0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		116,000		15,000
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		116,000		15,000

Retail:
1-4 family mortgages		419,000		292,000
Other consumer loans		0		0
Total retail		419,000		292,000

Total with an allowance recorded	$	535,000	$	307,000

Total nonaccrual loans:
Commercial	$	365,000	$	15,000
Retail		1,734,000		292,000
Total nonaccrual loans	$	2,099,000	$	307,000

No interest income was recognized on nonaccrual loans during the first six months of 2023.

Nonaccrual loans as of December 31, 2022 were as follows:

	Amortized		Related
	Cost		Allowance
With no allowance recorded:
Commercial:
Commercial and industrial	$	249,000	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		249,000		0

Retail:
1-4 family mortgages		1,064,000		0
Other consumer loans		0		0
Total retail		1,064,000		0

Total with no allowance recorded	$	1,313,000	$	0

With an allowance recorded:
Commercial:
Commercial and industrial	$	5,775,000	$	2,051,000
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		248,000		32,000
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		6,023,000		2,083,000

Retail:
1-4 family mortgages		392,000		200,000
Other consumer loans		0		0
Total retail		392,000		200,000

Total with an allowance recorded	$	6,415,000	$	2,283,000

Total nonaccrual loans:
Commercial	$	6,272,000	$	2,083,000
Retail		1,456,000		200,000
Total nonaccrual loans	$	7,728,000	$	2,283,000

No interest income was recognized on nonaccrual loans during 2022.

Credit Quality Indicators. We utilize a comprehensive grading system for our commercial loans. All commercial loans are graded on a ten grade rating system. The rating system utilizes standardized grade paradigms that analyze several critical factors such as cash flow, operating performance, financial condition, collateral, industry condition and management. All commercial loans are graded at inception and reviewed and, if appropriate, re-graded at various intervals thereafter. The primary risk elements with respect to commercial loans are the financial condition of the borrower, the sufficiency of collateral, and timeliness of scheduled payments. We have a policy of requesting and reviewing periodic financial statements from commercial loan customers and employ a disciplined and formalized review of the existence of collateral and its value. All commercial loans are graded using the following criteria:

Grade 1.	“Exceptional” Loans with this rating contain very little, if any, risk.

Grade 2.	“Outstanding” Loans with this rating have excellent and stable sources of repayment and conform to bank policy and regulatory requirements.

Grade 3.	“Very Good” Loans with this rating have strong sources of repayment and conform to bank policy and regulatory requirements. These are loans for which repayment risks are acceptable.

Grade 4.	“Good” Loans with this rating have solid sources of repayment and conform to bank policy and regulatory requirements. These are loans for which repayment risks are modest.

Grade 5.	“Acceptable” Loans with this rating exhibit acceptable sources of repayment and conform with most bank policies and all regulatory requirements. These are for loans for which repayment risks are satisfactory.

Grade 6.	“Monitor” Loans with this rating are considered to have emerging weaknesses which may include negative current cash flow, high leverage, or operating losses. Generally, if further deterioration is observed, these credits will be downgraded to the criticized asset report.

Grade 7.	“Special Mention” Loans with this rating have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan at some future date.

Grade 8.	“Substandard” Loans with this rate are inadequately protected by current sound net worth, paying capacity of the obligor, or of the pledged collateral, if any. A Substandard loan normally has one or more well-defined weaknesses that jeopardize the repayment of the debt. They are characterized by the distinct possibility of loss if the deficiencies are not corrected.

Grade 9.	“Doubtful” Loans with this rating exhibit all the weaknesses inherent in the Substandard classification and where collection or liquidation in full is highly questionable and improbable.

Grade 10.	“Loss” Loans with this rating are considered uncollectable, and of such little value that continuance as an active asset is not warranted.

The primary risk element with respect to each residential real estate loan and consumer loan is the timeliness of scheduled payments. We have a reporting system that monitors past due loans and have adopted policies to pursue creditors’ rights in order to preserve our collateral position. Retail loans that reach 90 days or more past due are generally placed into nonaccrual status and are categorized as nonperforming.

The following table reflects amortized cost basis of loans and year-to-date loan charge-offs as of June 30, 2023 based on year of origination (dollars in thousands):

	2023		2022		2021		2020		2019		Prior		Term Total		Revolving Loans		Grand Total
Commercial:
Commercial and Industrial:
Grades 1 – 4	$	70,344	$	110,829	$	115,238	$	34,358	$	7,818	$	9,862	$	348,449	$	395,751	$	744,200
Grades 5 – 7		57,388		101,094		39,034		24,439		7,896		186		230,037		211,809		441,846
Grades 8 – 9		9,791		0		266		0		0		0		10,057		16,093		26,150
Total	$	137,523	$	211,923	$	154,538	$	58,797	$	15,714	$	10,048	$	588,543	$	623,653	$	1,212,196
Current year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	218	$	218

Vacant Land, Land Development and Residential Construction:
Grades 1 – 4	$	12,715	$	22,089	$	3,369	$	2,835	$	0	$	298	$	41,306	$	0	$	41,306
Grades 5 – 7		11,504		15,308		3,373		330		45		546		31,106		174		31,280
Grades 8 – 9		11		0		0		0		0		85		96		0		96
Total	$	24,230	$	37,397	$	6,742	$	3,165	$	45	$	929	$	72,508	$	174	$	72,682
Current year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Real Estate – Owner Occupied:
Grades 1 – 4	$	143,011	$	115,599	$	83,379	$	51,608	$	18,025	$	18,344	$	429,966	$	0	$	429,966
Grades 5 – 7		60,088		76,351		38,774		30,039		9,739		11,196		226,187		48		226,235
Grades 8 – 9		207		2,635		0		42		0		116		3,000		0		3,000
Total	$	203,306	$	194,585	$	122,153	$	81,689	$	27,764	$	29,656	$	659,153	$	48	$	659,201
Current year-to-date gross write offs	$	0	$	14	$	0	$	0	$	0	$	0	$	14	$	0	$	14

Real Estate – Non-Owner Occupied:
Grades 1 – 4	$	29,085	$	96,215	$	117,813	$	95,378	$	42,493	$	39,708	$	420,692	$	0	$	420,692
Grades 5 – 7		118,268		137,493		136,069		99,324		6,690		26,538		524,382		0		524,382
Grades 8 – 9		0		6,575		5,572		0		0		0		12,147		0		12,147
Total	$	147,353	$	240,283	$	259,454	$	194,702	$	49,183	$	66,246	$	957,221	$	0	$	957,221
Current year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Real Estate – Multi-Family and Residential Rental:
Grades 1 – 4	$	14,641	$	44,570	$	58,445	$	35,626	$	5,057	$	6,031	$	164,370	$	0	$	164,370
Grades 5 – 7		41,454		48,247		5,536		11,661		2,947		1,778		111,623		0		111,623
Grades 8 – 9		11,250		0		0		0		0		42		11,292		0		11,292
Total	$	67,345	$	92,817	$	63,981	$	47,287	$	8,004	$	7,851	$	287,285	$	0	$	287,285
Current year-to-date gross write offs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Total Commercial	$	579,757	$	777,005	$	606,868	$	385,640	$	100,710	$	114,730	$	2,564,710	$	623,875	$	3,188,585
Total Comm current YTD gross write offs	$	0	$	14	$	0	$	0	$	0	$	0	$	14	$	218	$	232

	2023		2022		2021		2020		2019		Prior		Term Total		Revolving Loans		Grand Total
Retail:
1-4 Family Mortgages:
Performing	$	79,136	$	330,384	$	238,932	$	85,225	$	11,191	$	50,146	$	795,014	$	36,450	$	831,464
Nonperforming		0		82		491		0		12		1,149		1,734		0		1,734
Total	$	79,136	$	330,466	$	239,423	$	85,225	$	11,203	$	51,295	$	796,748	$	36,450	$	833,198
Current year-to-date gross write offs	$	0	$	52	$	0	$	0	$	0	$	239	$	291	$	21	$	312

Other Consumer Loans:
Performing	$	3,106	$	3,368	$	2,043	$	687	$	820	$	441	$	10,465	$	19,595	$	30,060
Nonperforming		0		0		0		0		0		0		0		0		0
Total	$	3,106	$	3,368	$	2,043	$	687	$	820	$	441	$	10,465	$	19,595	$	30,060
Current year-to-date gross write offs	$	0	$	3	$	0	$	0	$	0	$	3	$	6	$	17	$	23

Total Retail	$	82,242	$	333,834	$	241,466	$	85,912	$	12,023	$	51,736	$	807,213	$	56,045	$	863,258
Total Retail Current YTD gross write offs	$	0	$	55	$	0	$	0	$	0	$	242	$	297	$	38	$	335

Grand Total	$	661,999	$	1,110,839	$	848,334	$	471,552	$	112,733	$	166,466	$	3,371,923	$	679,920	$	4,051,843
Grand Total Current YTD gross write offs	$	0	$	69	$	0	$	0	$	0	$	242	$	311	$	256	$	567

There were no revolving loans converted to term loans during the first six months of 2023.

The following table reflects amortized cost of basis of loans as of December 31, 2022 based on year of origination (dollars in thousands):

	2022		2021		2020		2019		2018		Prior		Term Total		Revolving Loans		Grand Total
Commercial:
Commercial and Industrial:
Grades 1 – 4	$	115,494	$	141,481	$	43,961	$	9,194	$	3,230	$	9,851	$	323,211	$	396,372	$	719,583
Grades 5 – 7		151,783		47,030		31,697		8,870		569		93		240,042		210,363		450,405
Grades 8 – 9		3,784		249		0		0		48		29		4,110		10,985		15,095
Total	$	271,061	$	188,760	$	75,658	$	18,064	$	3,847	$	9,973	$	567,363	$	617,720	$	1,185,083

Vacant Land, Land Development and Residential Construction:
Grades 1 – 4	$	31,756	$	6,196	$	3,428	$	0	$	0	$	331	$	41,711	$	0	$	41,711
Grades 5 – 7		10,270		8,760		351		50		0		626		20,057		0		20,057
Grades 8 – 9		0		0		0		0		14		91		105		0		105
Total	$	42,026	$	14,956	$	3,779	$	50	$	14	$	1,048	$	61,873	$	0	$	61,873

Real Estate – Owner Occupied:
Grades 1 – 4	$	194,072	$	113,528	$	53,630	$	19,670	$	19,279	$	6,162	$	406,341	$	0	$	406,341
Grades 5 – 7		115,720		56,173		33,913		10,245		12,550		1,165		229,766		0		229,766
Grades 8 – 9		2,919		0		44		0		122		0		3,085		0		3,085
Total	$	312,711	$	169,701	$	87,587	$	29,915	$	31,951	$	7,327	$	639,192	$	0	$	639,192

Real Estate – Non-Owner Occupied:
Grades 1 – 4	$	121,281	$	152,035	$	89,125	$	44,196	$	10,079	$	12,018	$	428,734	$	0	$	428,734
Grades 5 – 7		176,217		142,645		133,163		35,200		13,456		37,399		538,080		0		538,080
Grades 8 – 9		6,712		5,688		0		0		0		0		12,400		0		12,400
Total	$	304,210	$	300,368	$	222,288	$	79,396	$	23,535	$	49,417	$	979,214	$	0	$	979,214

Real Estate – Multi-Family and Residential Rental:
Grades 1 – 4	$	39,342	$	49,178	$	36,348	$	5,306	$	3,082	$	4,003	$	137,259	$	0	$	137,259
Grades 5 – 7		56,018		47,474		19,666		3,162		2,557		283		129,160		0		129,160
Grades 8 – 9		0		0		0		0		0		49		49		0		49
Total	$	95,360	$	96,652	$	56,014	$	8,468	$	5,639	$	4,335	$	266,468	$	0	$	266,468
Total Commercial	$	1,025,368	$	770,437	$	445,326	$	135,893	$	64,986	$	72,100	$	2,514,110	$	617,720	$	3,131,830

	2022		2021		2020		2019		2018		Prior		Term Total		Revolving Loans		Grand Total

Retail:
1-4 Family Mortgages:
Performing	$	313,611	$	242,950	$	91,936	$	12,094	$	14,297	$	41,622	$	716,510	$	37,070	$	753,580
Nonperforming		142		82		0		0		203		1,029		1,456		0		1,456
Total	$	313,753	$	243,032	$	91,936	$	12,094	$	14,500	$	42,651	$	717,966	$	37,070	$	755,036

Other Consumer Loans:
Performing	$	4,349	$	2,870	$	1,040	$	1,074	$	395	$	430	$	10,158	$	19,595	$	29,753
Nonperforming		0		0		0		0		0		0		0		0		0
Total	$	4,349	$	2,870	$	1,040	$	1,074	$	395	$	430	$	10,158	$	19,595	$	29,753
Total Retail	$	318,102	$	245,902	$	92,976	$	13,168	$	14,895	$	43,081	$	728,124	$	56,665	$	784,789

Grand Total	$	1,343,470	$	1,016,339	$	538,302	$	149,061	$	79,881	$	115,181	$	3,242,234	$	674,385	$	3,916,619

There were no revolving loans converted to term loans during 2022.

Activity in the allowance for credit losses during the three months and six months ended June 30, 2023 is as follows (dollars in thousands):

	Commercial and industrial			Commercial vacant land, land development and residential construction			Commercial real estate – owner occupied			Commercial real estate – non-owner occupied			Commercial real estate – multi-family and residential rental		1-4 family mortgages			Other consumer loans			Unallocated			Total
Allowance for credit losses:
Balance at 3-31-23	$	10,181		$	510		$	5,711		$	9,168		$	2,427	$	14,648		$	156		$	76		$	42,877
Provision for credit losses		(3,616	)		(217	)		105			(479	)		1,268		4,973			21			(55	)		2,000
Charge-offs		(182	)		0			0			0			0		(270	)		(9	)		0			(461	)
Recoveries		89			11			22			0			5		147			31			0			305
Ending balance	$	6,472		$	304		$	5,838		$	8,689		$	3,700	$	19,498		$	199		$	21		$	44,721


Balance at 12-31-22	$	10,203		$	490		$	5,914		$	9,242		$	2,191	$	14,027		$	160		$	19		$	42,246
Provision for credit losses		(3,623	)		(198	)		(132	)		(553	)		1,497		5,591			16			2			2,600
Charge-offs		(218	)		0			(14	)		0			0		(312	)		(23	)		0			(567	)
Recoveries		110			12			70			0			12		192			46			0			442
Ending balance	$	6,472		$	304		$	5,838		$	8,689		$	3,700	$	19,498		$	199		$	21		$	44,721

Activity in the allowance for credit losses during the three months and six months ended June 30, 2022 is as follows (dollars in thousands):

	Commercial and industrial			Commercial vacant land, land development and residential construction			Commercial real estate – owner occupied			Commercial real estate – non-owner occupied			Commercial real estate – multi-family and residential rental			1-4 family mortgages			Other consumer loans			Unallocated			Total
Allowance for credit losses:
Balance at 3-31-22	$	8,413		$	455		$	5,803		$	9,932		$	1,666		$	8,562		$	191		$	131		$	35,153
Provision for credit losses		150			(10	)		(251	)		(683	)		(33	)		1,464			(28	)		(109	)		500
Charge-offs		0			0			0			0			0			0			(15	)		0			(15	)
Recoveries		45			1			26			0			6			241			17			0			336
Ending balance	$	8,608		$	446		$	5,578		$	9,249		$	1,639		$	10,267		$	165		$	22		$	35,974


Balance at 12-31-21	$	10,782		$	420		$	6,045		$	12,990		$	2,006		$	2,449		$	626		$	45		$	35,363
Adoption of ASU 2016-13		(1,571	)		(43	)		(560	)		(2,534	)		(621	)		5,395			(411	)		(55	)		(400	)
Provision for credit losses		(592	)		96			35			(1,207	)		240			2,057			(61	)		32			600
Charge-offs		(171	)		(29	)		0			0			0			(2	)		(18	)		0			(220	)
Recoveries		160			2			58			0			14			368			29			0			631
Ending balance	$	8,608		$	446		$	5,578		$	9,249		$	1,639		$	10,267		$	165		$	22		$	35,974

The following table presents the financial effect by type of modification made to borrowers experiencing financial difficulty and loan segment:

	Interest Rate Reduction		Term Extension		Principal Forgiveness
Commercial:
Commercial and industrial	$	0	$	10,520,000	$	0
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		207,000		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total commercial	$	0	$	10,727,000	$	0

Retail:
1-4 family mortgages		0		0		0
Other consumer loans		0		0		0
Total retail	$	0	$	0	$	0

Total loans	$	0	$	10,727,000	$	0

Loans listed under Term Extension were generally granted a series of short-term maturity extensions as part of workout process and associated forbearance agreements.

The following table presents the period-end amortized cost basis of loans that have been modified in the past twelve months to borrowers experiencing financial difficulty by payment status and loan segment:

	Current		30 – 89 Days Past Due		90 + Days Past Due		Total
Commercial:
Commercial and industrial	$	10,520,000	$	0	$	0	$	10,520,000
Vacant land, land development and residential construction		0		0		0		0
Real estate – owner occupied		207,000		0		0		207,000
Real estate – non-owner occupied		0		0		0		0
Real estate – multi-family and residential rental		0		0		0		0
Total commercial	$	10,727,000	$	0	$	0	$	10,727,000

Retail:
1-4 family mortgages		0		0		0		0
Other consumer loans		0		0		0		0
Total retail	$	0	$	0	$	0	$	0

Total loans	$	10,727,000	$	0	$	0	$	10,727,000

Loans modified as troubled debt restructurings during the three months ended June 30, 2022 were as follows:

	Number of Contracts		Pre- Modification Recorded Principal Balance		Post- Modification Recorded Principal Balance

Commercial:
Commercial and industrial		2	$	6,573,000	$	6,573,000
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total commercial		2		6,573,000		6,573,000

Retail:
1-4 family mortgages		1		84,000		84,000
Other consumer loans		0		0		0
Total retail		1		84,000		84,000

Total loans		3	$	6,657,000	$	6,657,000

Loans modified as troubled debt restructurings during the six months ended June 30, 2022 were as follows:

	Number of Contracts		Pre- Modification Recorded Principal Balance		Post- Modification Recorded Principal Balance

Commercial:
Commercial and industrial		2	$	6,573,000	$	6,573,000
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total commercial		2		6,573,000		6,573,000

Retail:
1-4 family mortgages		3		212,000		212,000
Other consumer loans		0		0		0
Total retail		3		212,000		212,000

Total loans		5	$	6,785,000	$	6,785,000

The following loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due within the three months ended June 30, 2022 (amounts as of period end):

	Number of Contracts		Recorded Principal Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		0		0

Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0

Total		0	$	0

The following loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due within the six months ended June 30, 2022 (amounts as of period end):

	Number of Contracts		Recorded Principal Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		0		0

Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0

Total		0	$	0

Activity for loans categorized as troubled debt restructurings during the three months ended June 30, 2022 is as follows:

	Commercial and Industrial		Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental

Commercial Loan Portfolio:
Beginning Balance	$	2,829,000	$	0	$	89,000		$	143,000		$	90,000
Charge-Offs		0		0		0			0			0
Payments (net)		536,000		0		(2,000	)		(4,000	)		(2,000	)
Transfers to ORE		0		0		0			0			0
Net Additions/Deletions		6,573,000		0		0			0			0
Ending Balance	$	9,938,000	$	0	$	87,000		$	139,000		$	88,000

	Retail			Retail
	1-4 Family			Other Consumer
	Mortgages			Loans
Retail Loan Portfolio:
Beginning Balance	$	2,346,000		$	13,000
Charge-Offs		0			0
Payments (net)		(91,000	)		(10,000	)
Transfers to ORE		0			0
Net Additions/Deletions		84,000			0
Ending Balance	$	2,339,000		$	3,000

Activity for loans categorized as troubled debt restructurings during the six months ended June 30, 2022 is as follows:

	Commercial and Industrial		Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental

Commercial Loan Portfolio:
Beginning Balance	$	4,973,000	$	0	$	10,435,000		$	146,000		$	91,000
Charge-Offs		0		0		0			0			0
Payments (net)		324,000		0		(9,679,000	)		(7,000	)		(3,000	)
Transfers to ORE		0		0		0			0			0
Net Additions/Deletions		4,641,000		0		(669,000	)		0			0
Ending Balance	$	9,938,000	$	0	$	87,000		$	139,000		$	88,000

	Retail			Retail
	1-4 Family			Other Consumer
	Mortgages			Loans
Retail Loan Portfolio:
Beginning Balance	$	627,000		$	1,202,000
Charge-Offs		0			0
Payments (net)		(169,000	)		(12,000	)
Transfers to ORE		0			0
Net Additions/Deletions (1)		1,881,000			(1,187,000	)
Ending Balance	$	2,339,000		$	3,000

(1)

Includes $1.2 million in the transfer of home equity lines of credit from other consumer loans to 1-4 family mortgages in association with the adoption of the CECL methodology effective January 1, 2022.