Loans and Allowance for Credit Losses on Loans (Tables)

9 Months Ended

Sep. 30, 2021

Loans and Allowance for Credit Losses on Loans

Schedule of loans

	September 30,		December 31,
	2021		2020
	(Dollars in thousands)
Loans held-for-investment:
Commercial	$	743,450	$	846,386
Real estate:
CRE - owner occupied		580,624		560,362
CRE - non-owner occupied		829,022		693,103
Land and construction		141,277		144,594
Home equity		106,690		111,885
Multifamily		205,952		166,425
Residential mortgages		211,467		85,116
Consumer and other		20,106		18,116
Loans		2,838,588		2,625,987
Deferred loan fees, net		(5,729)		(6,726)
Loans, net of deferred fees		2,832,859		2,619,261
Allowance for credit losses on loans		(43,680)		(44,400)
Loans, net	$	2,789,179	$	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 September 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	$	10,857	$	8,206	$	16,485	$	2,136	$	1,069	$	2,950	$	1,968	$	285	$	43,956
Charge-offs		(65)		—		—		—		—		—		—		—		(65)
Recoveries		263		4		—		—		36		—		—		—		303
Net recoveries		198		4		—		—		36		—		—		—		238
Provision for (recapture of) credit losses on loans		(822)		57		665		(112)		(94)		(61)		(97)		(50)		(514)
End of period balance	$	10,233	$	8,267	$	17,150	$	2,024	$	1,011	$	2,889	$	1,871	$	235	$	43,680

	Three Months Ended September 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	$	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 (charge-offs) recoveries		(159)		-		-		19		16		-		-		(95)		(219)
Provision for (recapture of) 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

	Nine Months Ended September 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		(433)		—		—		—		—		—		—		—		(433)
Recoveries		1,191		12		—		884		75		—		—		70		2,232
Net recoveries		758		12		—		884		75		—		—		70		1,799
Provision for (recapture of) credit losses on loans		(2,112)		(305)		734		(1,369)		(361)		85		928		(119)		(2,519)
End of period balance	$	10,233	$	8,267	$	17,150	$	2,024	$	1,011	$	2,889	$	1,871	$	235	$	43,680

	Nine Months Ended September 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		(1,637)		—		—		—		—		—		—		(99)		(1,736)
Recoveries		598		1		—		51		70		—		—		2		722
Net (charge-offs) recoveries		(1,039)		1		—		51		70		—		—		(97)		(1,014)
Provision for (recapture of) 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

Schedule of nonperforming loans by class

	September 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	$	89	$	1,216	$	157	$	1,462
Real estate:
CRE - Owner Occupied		1,136		—		—		1,136
CRE - Non-Owner Occupied		—		—		485		485
Home equity		94		—		—		94
Multifamily		1,149		—		—		1,149
Consumer and other		407		—		—		407
Total	$	2,875	$	1,216	$	642	$	4,733

	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

	September 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	$	5,105	$	1,070	$	291	$	6,466	$	736,984	$	743,450
Real estate:
CRE - Owner Occupied		568		—		1,136		1,704		578,920		580,624
CRE - Non-Owner Occupied		—		—		485		485		828,537		829,022
Land and construction		—		—		—		—		141,277		141,277
Home equity		—		—		—		—		106,690		106,690
Multifamily		—		—		—		—		205,952		205,952
Residential mortgages		—		—		—		—		211,467		211,467
Consumer and other		—		—		407		407		19,699		20,106
Total	$	5,673	$	1,070	$	2,319	$	9,062	$	2,829,526	$	2,838,588

	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 as of September 30, 2021												Amortized
											2016 and			Cost
	9/30/2021		12/31/2020		12/31/2019		12/31/2018		12/31/2017		Prior			Basis		Total
	(Dollars in thousands)
Commercial:
Pass	$	244,357	$	77,588	$	17,048	$	14,440	$	8,248	$	7,666	$	357,811	$	727,158
Special Mention		192		528		225		879		518		225		1,245		3,812
Substandard		1,769		3,266		-		31		472		3		5,634		11,175
Substandard-Nonaccrual		713		440		49		-		-		103		-		1,305
Total		247,031		81,822		17,322		15,350		9,238		7,997		364,690		743,450
CRE - Owner Occupied:
Pass		117,435		143,755		72,641		58,229		36,514		120,856		14,424		563,854
Special Mention		-		7,928		676		-		-		363		-		8,967
Substandard		-		3,150		-		1,879		735		903		-		6,667
Substandard-Nonaccrual		-		1,109		-		-		-		27		-		1,136
Total		117,435		155,942		73,317		60,108		37,249		122,149		14,424		580,624
CRE - Non-Owner Occupied:
Pass		271,803		144,254		119,996		50,388		71,693		143,970		3,646		805,750
Special Mention		-		8,152		-		-		1,741		8,410				18,303
Substandard		-		3,099		-		1,385		-		485		-		4,969
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		271,803		155,505		119,996		51,773		73,434		152,865		3,646		829,022
Land and construction:
Pass		108,338		20,750		4,427		-		-		1,310		5,093		139,918
Special Mention		-		-		-		-		-		-		-		-
Substandard		1,359		-		-		-		-		-		-		1,359
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		109,697		20,750		4,427		-		-		1,310		5,093		141,277
Home equity:
Pass		-		-		-		52		-		-		103,690		103,742
Special Mention		-		-		-		-		-		-		1,931		1,931
Substandard		-		-		-		-		-		143		780		923
Substandard-Nonaccrual		-		94		-		-		-		-				94
Total		-		94		-		52		-		143		106,401		106,690
Multifamily:
Pass		75,736		30,474		35,318		16,238		18,798		20,928		-		197,492
Special Mention		5,833		-		-		-		-				-		5,833
Substandard		604		874		-		-		-		-		-		1,478
Substandard-Nonaccrual		1,149		-		-		-		-		-		-		1,149
Total		83,322		31,348		35,318		16,238		18,798		20,928		-		205,952
Residential mortgage:
Pass		150,146		18,095		8,130		3,113		6,053		24,672		-		210,209
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		1,258		-		1,258
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		150,146		18,095		8,130		3,113		6,053		25,930		-		211,467
Consumer and other:
Pass		408		3		48		1,442		16		1,025		16,740		19,682
Special Mention		-		-		-		-		-		-		-		-
Substandard		17		-		-		-		-		-				17
Substandard-Nonaccrual		-		-		-		407		-		-		-		407
Total		425		3		48		1,849		16		1,025		16,740		20,106
Total loans	$	979,859	$	463,559	$	258,558	$	148,483	$	144,788	$	332,347	$	510,994	$	2,838,588
Risk Grades:
Pass	$	968,223	$	434,919	$	257,608	$	143,902	$	141,322	$	320,427	$	501,404	$	2,767,805
Special Mention		6,025		16,608		901		879		2,259		8,998		3,176		38,846
Substandard		3,749		10,389		-		3,295		1,207		2,792		6,414		27,846
Substandard-Nonaccrual		1,862		1,643		49		407		-		130		-		4,091
Grand Total	$	979,859	$	463,559	$	258,558	$	148,483	$	144,788	$	332,347	$	510,994	$	2,838,588

														Revolving
														Loans
		Term Loans Amortized Cost Basis by Originated Period as of December 31, 2020												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 September 30, 2021:

	Collateral Type
	Real
	Estate		Business
	Property		Assets			Total
	(Dollars in thousands)
Commercial	$	25	$	1,191	$	1,216
Total	$	25	$	1,191	$	1,216

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 Three Months Ended
	September 30, 2021
				Pre-modification		Post-modification
		Number		Outstanding		Outstanding
		of		Recorded		Recorded
Troubled Debt Restructurings:		Contracts		Investment		Investment
	(Dollars in thousands)
Commercial		—	$	—	$	—
Total		—	$	—	$	—

	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, 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 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