Loans and Allowance for Credit Losses on Loans (Tables)

6 Months Ended

Jun. 30, 2021

Loans and Allowance for Credit Losses on Loans

Schedule of loans

	June 30,		December 31,
	2021		2020
	(Dollars in thousands)
Loans held-for-investment:
Commercial	$	844,147	$	846,386
Real estate:
CRE - owner occupied		583,091		560,362
CRE - non-owner occupied		742,135		693,103
Land and construction		129,426		144,594
Home equity		107,873		111,885
Multifamily		198,771		166,425
Residential mortgages		205,904		85,116
Consumer and other		21,519		18,116
Loans		2,832,866		2,625,987
Deferred loan fees, net		(8,070)		(6,726)
Loans, net of deferred fees		2,824,796		2,619,261
Allowance for credit losses on loans		(43,956)		(44,400)
Loans, net	$	2,780,840	$	2,574,861

Schedule of changes in allowance for loan (credit) losses

Changes in the allowance for credit losses on loans were as follows for the periods indicated:

	Three Months Ended June 30, 2021
			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	$	11,600	$	8,368	$	16,431	$	2,754	$	1,171	$	2,751	$	918	$	303	$	44,296
Charge-offs		(105)		—		—		—		—		—		—		—		(105)
Recoveries		115		4		—		68		16		—		—		55		258
Net recoveries		10		4		—		68		16		—		—		55		153
Provision for (recapture of) credit losses on loans		(753)		(166)		54		(686)		(118)		199		1,050		(73)		(493)
End of period balance	$	10,857	$	8,206	$	16,485	$	2,136	$	1,069	$	2,950	$	1,968	$	285	$	43,956

	Three Months Ended June 30, 2020
			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	$	12,801	$	7,737	$	15,645	$	2,603	$	1,746	$	1,622	$	708	$	1,841	$	44,703
Charge-offs		(465)		-		-		-		-		-		-		-		(465)
Recoveries		46		1		-		13		31		-		-		1		92
Net (charge-offs) recoveries		(419)		1		-		13		31		-		-		1		(373)
Provision for (recapture of) credit losses on loans		797		809		(196)		(64)		74		206		117		(629)		1,114
End of period balance	$	13,179	$	8,547	$	15,449	$	2,552	$	1,851	$	1,828	$	825	$	1,213	$	45,444

	Six Months Ended June 30, 2021
			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	$	11,587	$	8,560	$	16,416	$	2,509	$	1,297	$	2,804	$	943	$	284	$	44,400
Charge-offs		(368)		—		—		—		—		—		—		—		(368)
Recoveries		928		8		—		884		39		—		—		70		1,929
Net recoveries		560		8		—		884		39		—		—		70		1,561
Provision for (recapture of) credit losses on loans		(1,290)		(362)		69		(1,257)		(267)		146		1,025		(69)		(2,005)
End of period balance	$	10,857	$	8,206	$	16,485	$	2,136	$	1,069	$	2,950	$	1,968	$	285	$	43,956

	Six Months Ended June 30, 2020
			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		(1,135)		—		—		—		—		—		—		(3)		(1,138)
Recoveries		255		1		—		32		54		—		—		1		343
Net (charge-offs) recoveries		(880)		1		—		32		54		—		—		(2)		(795)
Provision for (recapture of) credit losses on loans		7,269		1,552		3,777		1,062		476		575		147		(474)		14,384
End of period balance	$	13,179	$	8,547	$	15,449	$	2,552	$	1,851	$	1,828	$	825	$	1,213	$	45,444

Schedule of nonperforming loans by class

	June 30, 2021
						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	$	415	$	1,378	$	164	$	1,957
Real estate:
CRE - Owner Occupied		1,774		—		—		1,774
CRE - Non-Owner Occupied		—		—		725		725
Home equity		168		—		—		168
Multifamily		1,149		—		—		1,149
Consumer and other		407		—		—		407
Total	$	3,913	$	1,378	$	889	$	6,180

	December 31, 2020
					Restructured
	Nonaccrual		Nonaccrual		and Loans
	with no Specific		with no Specific		over 90 Days
	Allowance for		Allowance for		Past Due
	Credit		Credit		and Still
	Losses		Losses		Accruing		Total
	(Dollars in thousands)
Commercial	$	752	$	1,974	$	81	$	2,807
Real estate:
CRE - Owner Occupied		3,706		—		—		3,706
Home equity		949		—		—		949
Consumer and other		407		—		—		407
Total	$	5,814	$	1,974	$	81	$	7,869

Schedule of aging of past due loans by class of loans

	June 30, 2021
	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	$	4,467	$	1,187	$	261	$	5,915	$	838,232	$	844,147
Real estate:
CRE - Owner Occupied		1,172		9		1,143		2,324		580,767		583,091
CRE - Non-Owner Occupied		145		—		725		870		741,265		742,135
Land and construction		—		—		—		—		129,426		129,426
Home equity		—		—		—		—		107,873		107,873
Multifamily		—		—		—		—		198,771		198,771
Residential mortgages		—		—		—		—		205,904		205,904
Consumer and other		—		—		407		407		21,112		21,519
Total	$	5,784	$	1,196	$	2,536	$	9,516	$	2,823,350	$	2,832,866

	December 31, 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	$	3,524	$	259	$	392	$	4,175	$	842,211	$	846,386
Real estate:
CRE - Owner Occupied		1,133		—		29		1,162		559,200		560,362
CRE - Non-Owner Occupied		—		485		—		485		692,618		693,103
Land and construction		—		—		—		—		144,594		144,594
Home equity		—		—				—		111,885		111,885
Multifamily		—		—		—		—		166,425		166,425
Residential mortgages		—		—		—		—		85,116		85,116
Consumer and other		—		—		407		407		17,709		18,116
Total	$	4,657	$	744	$	828	$	6,229	$	2,619,758	$	2,625,987

Summary of loan portfolio by loan type and credit quality classification

														Revolving
														Loans
		Term Loans Amortized Cost Basis by Originated Period												Amortized
											2016 and			Cost
	6/30/2021		12/31/2020		12/31/2019		12/31/2018		12/31/2017		Prior			Basis		Total
	(Dollars in thousands)
Commercial:
Pass	$	302,753	$	163,815	$	19,144	$	15,904	$	9,543	$	8,699	$	307,122	$	826,980
Special Mention		323		733		-		1,082		447		270		978		3,833
Substandard		1,349		3,337		-		16		452		30		6,357		11,541
Substandard-Nonaccrual		30		1,143		-		-		-		106		514		1,793
Total		304,455		169,028		19,144		17,002		10,442		9,105		314,971		844,147
CRE - Owner Occupied:
Pass		78,046		154,477		74,843		66,269		37,006		135,709		24,038		570,388
Special Mention		531		2,648		680		1,495		770		1,089		-		7,213
Substandard				2,547		-		394		735		40		-		3,716
Substandard-Nonaccrual		-		1,774		-		-		-		-		-		1,774
Total		78,577		161,446		75,523		68,158		38,511		136,838		24,038		583,091
CRE - Non-Owner Occupied:
Pass		131,832		148,179		121,987		55,878		75,126		165,195		22,377		720,574
Special Mention		-		2,808		-		2,527		606		6,338		2,165		14,444
Substandard		-		5,240		-		1,392		-		485		-		7,117
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		131,832		156,227		121,987		59,797		75,732		172,018		24,542		742,135
Land and construction:
Pass		58,297		56,553		4,443		-		-		1,321		7,453		128,067
Special Mention		-		-		-		-		-		-		-		-
Substandard		1,359		-		-		-		-		-		-		1,359
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		59,656		56,553		4,443		-		-		1,321		7,453		129,426
Home equity:
Pass		-		-		-		61		-		-		104,746		104,807
Special Mention		-		-		-		-		-		-		1,932		1,932
Substandard		-		-		-		-		-		143		823		966
Substandard-Nonaccrual		-		107		-		-		-		-		61		168
Total		-		107		-		61		-		143		107,562		107,873
Multifamily:
Pass		42,576		32,568		37,612		16,321		21,215		35,092		915		186,299
Special Mention		-		-		-		-		-		10,444		-		10,444
Substandard		-		879		-		-		-		-		-		879
Substandard-Nonaccrual		1,149		-		-		-		-		-		-		1,149
Total		43,725		33,447		37,612		16,321		21,215		45,536		915		198,771
Residential mortgage:
Pass		137,195		18,204		9,379		3,157		5,129		30,567		960		204,591
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		1,313		-		1,313
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		137,195		18,204		9,379		3,157		5,129		31,880		960		205,904
Consumer and other:
Pass		-		6		409		1,456		17		1,051		17,953		20,892
Special Mention		-		-		-		-		-		-		-		-
Substandard		20		-		-		-		-		-		200		220
Substandard-Nonaccrual		-		-				407		-		-		-		407
Total		20		6		409		1,863		17		1,051		18,153		21,519
Total loans	$	755,460	$	595,018	$	268,497	$	166,359	$	151,046	$	397,892	$	498,594	$	2,832,866
Risk Grades:
Pass	$	750,699	$	573,802	$	267,817	$	159,046	$	148,036	$	377,634	$	485,564	$	2,762,598
Special Mention		854		6,189		680		5,104		1,823		18,141		5,075		37,866
Substandard		2,728		12,003		-		1,802		1,187		2,011		7,380		27,111
Substandard-Nonaccrual		1,179		3,024		-		407		-		106		575		5,291
Grand Total	$	755,460	$	595,018	$	268,497	$	166,359	$	151,046	$	397,892	$	498,594	$	2,832,866

														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	$	431,369	$	33,350	$	21,154	$	13,840	$	7,341	$	8,292	$	296,286	$	811,632
Special Mention		15,720		716		1,301		953		713		170		1,937		21,510
Substandard		4,036		-		19		758		2,396		73		3,236		10,518
Substandard-Nonaccrual		2,106		56		36		-		115		26		387		2,726
Total		453,231		34,122		22,510		15,551		10,565		8,561		301,846		846,386
CRE - Owner Occupied:
Pass		168,224		73,064		68,068		51,705		50,716		109,350		15,964		537,091
Special Mention		3,151		2,568		4,128		783		-		2,569		-		13,199
Substandard		2,561		-		400		2,954		-		451		-		6,366
Substandard-Nonaccrual		3,678		-		-		-		-		28		-		3,706
Total		177,614		75,632		72,596		55,442		50,716		112,398		15,964		560,362
CRE - Non-Owner Occupied:
Pass		166,550		128,361		68,796		99,816		57,422		150,683		1,926		673,554
Special Mention		11,930		-		2,557		-		-		-		-		14,487
Substandard		3,166		-		1,411		-		485		-		-		5,062
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		181,646		128,361		72,764		99,816		57,907		150,683		1,926		693,103
Land and construction:
Pass		114,932		22,054		-		-		-		1,343		4,906		143,235
Special Mention		-		-		-		-		-		-		-		-
Substandard		1,359		-		-		-		-		-		-		1,359
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		116,291		22,054		-		-		-		1,343		4,906		144,594
Home equity:
Pass		266		-		74		-		-		-		109,848		110,188
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		143		605		748
Substandard-Nonaccrual		117		-		-		-		-		-		832		949
Total		383		-		74		-		-		143		111,285		111,885
Multifamily:
Pass		31,481		39,183		17,248		24,572		16,235		30,751		880		160,350
Special Mention		-		-		-		-		-		5,186		-		5,186
Substandard		889		-		-		-		-		-		-		889
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		32,370		39,183		17,248		24,572		16,235		35,937		880		166,425
Residential mortgage:
Pass		12,798		10,048		3,246		7,324		28,115		15,568		-		77,099
Special Mention		5,089		-		1,630		-				-		-		6,719
Substandard		-		-		-		-		-		1,298		-		1,298
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		17,887		10,048		4,876		7,324		28,115		16,866		-		85,116
Consumer and other:
Pass		10		522		1,486		20		116		987		14,568		17,709
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-
Substandard-Nonaccrual		-		-		407		-		-		-		-		407
Total		10		522		1,893		20		116		987		14,568		18,116
Total loans	$	979,432	$	309,922	$	191,961	$	202,725	$	163,654	$	326,918	$	451,375	$	2,625,987
Risk Grades:.
Pass	$	925,630	$	306,582	$	180,072	$	197,277	$	159,945	$	316,974	$	444,378	$	2,530,858
Special Mention		35,890		3,284		9,616		1,736		713		7,925		1,937		61,101
Substandard		12,011		-		1,830		3,712		2,881		1,965		3,841		26,240
Substandard-Nonaccrual		5,901		56		443		-		115		54		1,219		7,788
Grand Total	$	979,432	$	309,922	$	191,961	$	202,725	$	163,654	$	326,918	$	451,375	$	2,625,987

Schedule of amortized cost basis of collateral-dependent loans

The following table presents the amortized cost basis of collateral-dependent loans by loan classification at June 30, 2021:

	Collateral Type
	Real
	Estate		Business
	Property		Assets		Unsecured			Total
	(Dollars in thousands)
Commercial	$	25	$	1,324	$	29	$	1,378
Total	$	25	$	1,324	$	29	$	1,378

The following table presents the amortized cost basis of collateral-dependent loans by loan classification at December 31, 2020:

	Collateral Type
	Real
	Estate		Business
	Property		Assets		Unsecured		Total
	(Dollars in thousands)
Commercial	$	29	$	1,815	$	130	$	1,974
Total	$	29	$	1,815	$	130	$	1,974

Schedule of loans by class modified as troubled debt restructurings

	During the Six Months Ended
		June 30, 2021
				Pre-modification		Post-modification
		Number		Outstanding		Outstanding
		of		Recorded		Recorded
Troubled Debt Restructurings:		Contracts		Investment		Investment
	(Dollars in thousands)
Commercial		1	$	3	$	3
Total		1	$	3	$	3

	During the Six Months Ended
		June 30, 2020
				Pre-modification		Post-modification
		Number		Outstanding		Outstanding
		of		Recorded		Recorded
Troubled Debt Restructurings:		Contracts		Investment		Investment
	(Dollars in thousands)
Commercial		3	$	13	$	13
Total		3	$	13	$	13