Loans and Allowance for Credit Losses on Loans (Tables)

9 Months Ended

Sep. 30, 2020

Allowance for Credit Losses on Loans

Schedule of loans

	September 30,		December 31,
	2020		2019
	(Dollars in thousands)
Loans held-for-investment:
Commercial	$	897,909	$	603,345
Real estate:
CRE - owner occupied		561,528		548,907
CRE - non-owner occupied		713,563		767,821
Land and construction		142,632		147,189
Home equity		111,468		151,775
Multifamily		169,791		180,623
Residential mortgages		91,077		100,759
Consumer and other		17,511		33,744
Loans		2,705,479		2,534,163
Deferred loan fees, net		(8,463)		(319)
Loans, net of deferred fees		2,697,016		2,533,844
Allowance for credit losses on loans(1)		(45,422)		(23,285)
Loans, net	$	2,651,594	$	2,510,559
(1)Allowance for credit losses on loans at September 30, 2020, Allowance for loan losses at December 31, 2019.

Schedule of changes in allowance for loan (credit) losses

			CRE		CRE
			Owner		Non-owner		Land &		Home		Multi-		Residential		Consumer
	Commercial		Occupied		Occupied		Construction		Equity		Family		Mortgage		and Other		Total
	(Dollars in thousands)
Beginning of period balance	$	13,179	$	8,547	$	15,449	$	2,552	$	1,851	$	1,828	$	825	$	1,213	$	45,444
Charge-offs		(502)		—		—		—		—		—		—		(96)		(598)
Recoveries		343		—		—		19		16		—		—		1		379
Net recoveries		(159)		—		—		19		16	—	—		—		(95)		(219)
Provision (credit) for credit losses on loans		(220)		736		(124)		(27)		14		21		(46)		(157)		197
End of period balance	$	12,800	$	9,283	$	15,325	$	2,544	$	1,881	$	1,849	$	779	$	961	$	45,422

	Commercial		Real Estate		Consumer		Total
	(Dollars in thousands)
Beginning of period balance	$	15,234	$	11,307	$	90	$	26,631
Charge-offs		(315)		—		(3)		(318)
Recoveries		115		43		—		158
Net recoveries		(200)		43		(3)		(160)
Provision (credit) for loan losses		(378)		(207)		9		(576)
End of period balance	$	14,656	$	11,143	$	96	$	25,895

			Owner		Non-owner		Land &		Home		Multi-		Residential		Consumer
	Commercial		Occupied		Occupied		Construction		Equity		Family		Mortgage		and Other		Total
	(Dollars in thousands)
Beginning of period balance	$	10,453	$	3,825	$	3,760	$	2,621	$	2,244	$	57	$	243	$	82	$	23,285
Adoption of Topic 326		(3,663)		3,169		7,912		(1,163)		(923)		1,196		435		1,607		8,570
Balance at adoption on January 1, 2020		6,790		6,994		11,672		1,458		1,321		1,253		678		1,689		31,855
Charge-offs		(1,637)		—		—		—		—		—		—		(99)		(1,736)
Recoveries		598		1		—		51		70		—		—		2		722
Net (charge-offs) recoveries		(1,039)		1		—		51		70		—		—		(97)		(1,014)
Provision (credit) for credit losses on loans		7,049		2,288		3,653		1,035		490		596		101		(631)		14,581
End of period balance	$	12,800	$	9,283	$	15,325	$	2,544	$	1,881	$	1,849	$	779	$	961	$	45,422

	Commercial		Real Estate		Consumer		Total
	(Dollars in thousands)
Beginning of period balance	$	17,061	$	10,671	$	116	$	27,848
Charge-offs		(617)		—		(3)		(620)
Recoveries		917		127		—		1,044
Net recoveries		300		127		(3)		424
Provision (credit) for loan losses		(2,705)		345		(17)		(2,377)
End of period balance	$	14,656	$	11,143	$	96	$	25,895

Schedule of balance in allowance for loan losses and recorded investment in loans by portfolio segment, based on impairment method

					Allowance
	Unpaid				for Loan
	Principal		Recorded		Losses
	Balance		Investment		Allocated
	(Dollars in thousands)
With no related allowance recorded:
Commercial	$	2,113	$	2,113	$	—
Real estate:
CRE		5,094		5,094		—
Home Equity		360		360		—
Total with no related allowance recorded		7,567		7,567		—
With an allowance recorded:
Commercial		2,697		2,697		1,835
Total with an allowance recorded		2,697		2,697		1,835
Total	$	10,264	$	10,264	$	1,835

Schedule of loans held-for-investment individually evaluated for impairment by class of loans

	December 31, 2019
					Consumer
	Commercial		Real Estate		and other		Total
	(Dollars in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,835	$	—	$	—	$	1,835
Collectively evaluated for impairment		8,618		12,750		82		21,450
Total allowance balance	$	10,453	$	12,750	$	82	$	23,285
Loans:
Individually evaluated for impairment	$	4,810	$	5,454	$	—	$	10,264
Collectively evaluated for impairment		598,535		1,891,620		33,744		2,523,899
Total loan balance	$	603,345	$	1,897,074	$	33,744	$	2,534,163

Schedule of nonperforming loans by class

						Restructured
	Nonaccrual		Nonaccrual			and Loans
	with no Specific		with Specific			over 90 Days
	Allowance for		Allowance for			Past Due
	Credit		Credit			and Still
	Losses		Losses			Accruing	Total
	(Dollars in thousands)
Commercial	$	973	$	1,935	$	601	$	3,509
Real estate:
CRE - Owner Occupied		4,328		—		—		4,328
Home equity		961		—		—		961
Consumer and other		—		1,464		—		1,464
Total	$	6,262	$	3,399	$	601	$	10,262

			Restructured
			and Loans
			over 90 Days
			Past Due
			and Still
	Nonaccrual		Accruing		Total
	(Dollars in thousands)
Commercial	$	3,444	$	1,153	$	4,597
Real estate:
CRE		5,094		—		5,094
Home equity		137		—		137
Total	$	8,675	$	1,153	$	9,828

Schedule of aging of past due loans by class of loans

	September 30, 2020
	30 - 59		60 - 89		90 Days or
	Days		Days		Greater		Total
	Past Due		Past Due		Past Due		Past Due		Current		Total
	(Dollars in thousands)
Commercial	$	4,419	$	925	$	951	$	6,295	$	891,614	$	897,909
Real estate:
CRE - Owner Occupied		3,301		—		29		3,330		558,198		561,528
CRE - Non-Owner Occupied		—		—		—		—		713,563		713,563
Land and construction		—		—		—		—		142,632		142,632
Home equity		—		—				—		111,468		111,468
Multifamily		—		—		—		—		169,791		169,791
Residential mortgages		—		—		—		—		91,077		91,077
Consumer and other		496		—		1,464		1,960		15,551		17,511
Total	$	8,216	$	925	$	2,444	$	11,585	$	2,693,894	$	2,705,479

	December 31, 2019
	30 - 59		60 - 89		90 Days or
	Days		Days		Greater		Total
	Past Due		Past Due		Past Due		Past Due		Current		Total
	(Dollars in thousands)
Commercial	$	4,770	$	2,097	$	3,217	$	10,084	$	593,261	$	603,345
Real estate:
CRE - Owner Occupied		—		—		5,094		5,094		543,813		548,907
CRE - Non-Owner Occupied		—		—		—		—		767,821		767,821
Land and construction		—		—		—		—		147,189		147,189
Home equity		—		137		—		137		151,638		151,775
Multifamily		—		—		—		—		180,623		180,623
Residential mortgages		—		—		—		—		100,759		100,759
Consumer and other		—		—		—		—		33,744		33,744
Total	$	4,770	$	2,234	$	8,311	$	15,315	$	2,518,848	$	2,534,163

Schedule of amortized cost basis of collateral-dependent loans

		Collateral Type
		Real
		Estate		Business
		Property		Assets		Unsecured		Total
	(Dollars in thousands)
Commercial	$	55	$	1,750	$	130	$	1,935
Consumer and other		1,464		-		-		1,464
Total	$	1,519	$	1,750	$	130	$	3,399

Summary of loan portfolio by loan type and credit quality classification

														Revolving
														Loans
		Term Loans Amortized Cost Basis by Originated Period												Amortized
												2015 and		Cost
		2020		2019		2018		2017		2016		Prior		Basis		Total
	(Dollars in thousands)
Commercial:
Pass	$	457,725	$	42,241	$	26,085	$	16,428	$	8,742	$	10,737	$	307,076	$	869,034
Special Mention		6,730		1,800		701		1,228		788		410		2,061		13,718
Substandard		4,681		-		57		513		2,383		79		4,536		12,249
Substandard-Nonaccrual		2,353		57		-		-		152		56		290		2,908
Total		471,489		44,098		26,843		18,169		12,065		11,282		313,963		897,909
CRE - Owner Occupied:
Pass		137,721		73,778		74,997		53,799		52,560		121,007		15,963		529,825
Special Mention		9,073		5,595		2,637		-		-		4,648		-		21,953
Substandard		1,592		-		402		2,969		-		459		-		5,422
Substandard-Nonaccrual		3,756		543		-		-		-		29		-		4,328
Total		152,142		79,916		78,036		56,768		52,560		126,143		15,963		561,528
CRE - Non-Owner Occupied:
Pass		152,894		131,920		74,919		104,221		58,363		166,232		2,598		691,147
Special Mention		19,159		-		-		-		485		349		-		19,993
Substandard		1,002		-		1,421		-		-		-		-		2,423
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		173,055		131,920		76,340		104,221		58,848		166,581		2,598		713,563
Land and construction:
Pass		94,467		35,396		6,344		-		-		1,351		3,715		141,273
Special Mention		-		-		-		-		-		-		-		-
Substandard		1,359		-		-		-		-		-		-		1,359
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		95,826		35,396		6,344		-		-		1,351		3,715		142,632
Home equity:
Pass		275		-		78		-		-		-		109,396		109,749
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		143		615		758
Substandard-Nonaccrual		123		-		-		-		-		-		838		961
Total		398		-		78		-		-		143		110,849		111,468
Multifamily:
Pass		26,559		39,858		18,506		26,837		16,319		34,787		845		163,711
Special Mention		-		-		-		-		-		5,186		-		5,186
Substandard		894		-		-		-		-		-		-		894
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		27,453		39,858		18,506		26,837		16,319		39,973		845		169,791
Residential mortgage:
Pass		12,673		10,163		3,289		8,775		32,403		15,735		-		83,038
Special Mention		5,098		-		1,630		-				1,053		-		7,781
Substandard		-		-		-		-		-		258		-		258
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		17,771		10,163		4,919		8,775		32,403		17,046		-		91,077
Consumer and other:
Pass		12		539		1,500		21		128		1,008		12,839		16,047
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-
Substandard-Nonaccrual		-		-		1,464		-		-		-		-		1,464
Total		12		539		2,964		21		128		1,008		12,839		17,511
Total loans	$	938,146	$	341,890	$	214,030	$	214,791	$	172,323	$	363,527	$	460,772	$	2,705,479
Risk Grades:.
Pass	$	882,326	$	333,895	$	205,718	$	210,081	$	168,515	$	350,857	$	452,432	$	2,603,824
Special Mention		40,060		7,395		4,968		1,228		1,273		11,646		2,061		68,631
Substandard		9,528		-		1,880		3,482		2,383		939		5,151		23,363
Substandard-Nonaccrual		6,232		600		1,464		-		152		85		1,128		9,661
Grand Total	$	938,146	$	341,890	$	214,030	$	214,791	$	172,323	$	363,527	$	460,772	$	2,705,479

	December 31, 2019
	Nonclassified		Classified		Total
Commercial	$	599,143		4,202	$	603,345
Real estate:
CRE - Owner Occupied		538,229		10,678		548,907
CRE - Non-Owner Occupied		761,801		6,020		767,821
Land and construction		144,108		3,081		147,189
Home equity		149,131		2,644		151,775
Multifamily		180,623		—		180,623
Residential mortgages		100,262		497		100,759
Consumer and other		28,287		5,457		33,744
Total	$	2,501,584	$	32,579	$	2,534,163

Schedule of loans by class modified as troubled debt restructurings

	During the Three Months Ended
	September 30, 2020
				Pre-modification		Post-modification
		Number		Outstanding		Outstanding
		of		Recorded		Recorded
Troubled Debt Restructurings:		Contracts		Investment		Investment
	(Dollars in thousands)
Commercial		7	$	510	$	510
Total		7	$	510	$	510

	During the Nine Months Ended
		September 30, 2020
				Pre-modification		Post-modification
		Number		Outstanding		Outstanding
		of		Recorded		Recorded
Troubled Debt Restructurings:		Contracts		Investment		Investment
	(Dollars in thousands)
Commercial		10	$	520	$	520
Total		10	$	520	$	520

	During the Nine Months Ended
		September 30, 2019
				Pre-modification		Post-modification
		Number		Outstanding		Outstanding
		of		Recorded		Recorded
Troubled Debt Restructurings:		Contracts		Investment		Investment
	(Dollars in thousands)
Commercial		2	$	9	$	9
Total		2	$	9	$	9