Loans and Allowance for Credit Losses on Loans (Tables)

3 Months Ended

Mar. 31, 2023

Loans and Allowance for Credit Losses on Loans

Schedule of loans

	March 31,		December 31,
	2023		2022
	(Dollars in thousands)
Loans held-for-investment:
Commercial	$	506,602	$	533,915
Real estate:
CRE - owner occupied		603,298		614,663
CRE - non-owner occupied		1,083,852		1,066,368
Land and construction		166,408		163,577
Home equity		124,481		120,724
Multifamily		231,242		244,882
Residential mortgages		528,639		537,905
Consumer and other		17,905		17,033
Loans		3,262,427		3,299,067
Deferred loan fees, net		(512)		(517)
Loans, net of deferred fees		3,261,915		3,298,550
Allowance for credit losses on loans		(47,273)		(47,512)
Loans, net	$	3,214,642	$	3,251,038

Schedule of changes in allowance for loan (credit) losses

	Three Months Ended March 31, 2023
			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	$	6,617	$	5,751	$	22,135	$	2,941	$	666	$	3,366	$	5,907	$	129	$	47,512
Charge-offs		(134)		—		—		—		(246)		—		—		—		(380)
Recoveries		80		4		—		—		25		—		—		—		109
Net (charge-offs) recoveries		(54)		4		—		—		(221)		—		—		—		(271)
Provision for (recapture of) credit losses on loans		(29)		(302)		542		235		243		1,026		(1,711)		28		32
End of period balance	$	6,534	$	5,453	$	22,677	$	3,176	$	688	$	4,392	$	4,196	$	157	$	47,273

	Three Months Ended March 31, 2022
			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	$	8,414	$	7,954	$	17,125	$	1,831	$	864	$	2,796	$	4,132	$	174	$	43,290
Charge-offs		(16)		—		—		—		—		—		—		—		(16)
Recoveries		54		3		—		—		24		—		—		—		81
Net recoveries		38		3		—		—		24		—		—		—		65
Provision for (recapture of) credit losses on loans		(1,651)		(1,560)		2,288		175		(166)		(252)		625		(26)		(567)
End of period balance	$	6,801	$	6,397	$	19,413	$	2,006	$	722	$	2,544	$	4,757	$	148	$	42,788

Schedule of nonperforming loans

	March 31, 2023
						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	$	291	$	394	$	123	$	808
Real estate:
CRE - Owner Occupied		—		—		1,336		1,336
Home equity		96		—		—		96
Total	$	387	$	394	$	1,459	$	2,240

	December 31, 2022
					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	$	318	$	324	$	349	$	991
Real estate:
CRE - Non-Owner Occupied		—		—		1,336		1,336
Home equity		98		—		—		98
Total	$	416	$	324	$	1,685	$	2,425

Schedule of aging of past due loans by class of loans

	March 31, 2023
	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	$	7,756	$	2,239	$	436	$	10,431	$	496,171	$	506,602
Real estate:
CRE - Owner Occupied		1,121		—		—		1,121		602,177		603,298
CRE - Non-Owner Occupied		—		—		1,336		1,336		1,082,516		1,083,852
Land and construction		—		—		—		—		166,408		166,408
Home equity		96		—		—		96		124,385		124,481
Multifamily		—		—		—		—		231,242		231,242
Residential mortgages		6,431		1,649		—		8,080		520,559		528,639
Consumer and other		—		—		—		—		17,905		17,905
Total	$	15,404	$	3,888	$	1,772	$	21,064	$	3,241,363	$	3,262,427

	December 31, 2022
	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	$	7,236	$	2,519	$	703	$	10,458	$	523,457	$	533,915
Real estate:
CRE - Owner Occupied		252		—		—		252		614,411		614,663
CRE - Non-Owner Occupied		—		—		1,336		1,336		1,065,032		1,066,368
Land and construction		—		—		—		—		163,577		163,577
Home equity		—		98		—		98		120,626		120,724
Multifamily		—		—		—		—		244,882		244,882
Residential mortgages		4,202		720		—		4,922		532,983		537,905
Consumer and other		—		—		—		—		17,033		17,033
Total	$	11,690	$	3,337	$	2,039	$	17,066	$	3,282,001	$	3,299,067

Summary of loan portfolio by loan type and credit quality classification

														Revolving
														Loans
		Term Loans Amortized Cost Basis by Originated Period as of March 31, 2023												Amortized
											2018 and			Cost
	03/31/2023		12/31/2022		12/31/2021		12/31/2020		12/31/2019		Prior			Basis		Total
	(Dollars in thousands)
Commercial:
Pass	$	87,216	$	36,758	$	32,068	$	21,972	$	16,738	$	29,376	$	260,606	$	484,734
Special Mention		2,020		1,418		524		-		917		1,260		4,494		10,633
Substandard		4		321		620		-		274		4,370		4,961		10,550
Substandard-Nonaccrual		-		-		236		-		-		300		149		685
Total		89,240		38,497		33,448		21,972		17,929		35,306		270,210		506,602
CRE - Owner Occupied:
Pass		2,381		87,418		118,376		74,459		59,368		241,040		12,216		595,258
Special Mention		-		1,588		1,230		853		-		2,250		-		5,921
Substandard		990		-		-		-		1,121		8		-		2,119
Substandard-Nonaccrual				-		-		-		-		-		-		-
Total		3,371		89,006		119,606		75,312		60,489		243,298		12,216		603,298
CRE - Non-Owner Occupied:
Pass		30,477		239,675		270,999		29,747		99,910		398,297		3,416		1,072,521
Special Mention		-		-		-		-		-		3,354		-		3,354
Substandard		-		-		-		-		-		7,841		136		7,977
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		30,477		239,675		270,999		29,747		99,910		409,492		3,552		1,083,852
Land and construction:
Pass		16,276		64,546		56,324		23,113		6,149		-		-		166,408
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		16,276		64,546		56,324		23,113		6,149		-		-		166,408
Home equity:
Pass		-		-		-		-		-		116		119,343		119,459
Special Mention		-		-		-		-		-		-		4,640		4,640
Substandard		-		-		-		-		-		144		142		286
Substandard-Nonaccrual		-		-		96		-		-		-		-		96
Total		-		-		96		-		-		260		124,125		124,481
Multifamily:
Pass		2,977		41,892		57,255		5,493		42,919		78,199		215		228,950
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		2,292		-		2,292
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		2,977		41,892		57,255		5,493		42,919		80,491		215		231,242
Residential mortgage:
Pass		1,200		197,922		281,025		1,060		6,736		34,132		-		522,075
Special Mention		-		-		723		-		1,052		1,994		-		3,769
Substandard		-		-		1,873		-		-		922		-		2,795
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		1,200		197,922		283,621		1,060		7,788		37,048		-		528,639
Consumer and other:
Pass		-		386		10		-		-		2,202		15,230		17,828
Special Mention		-		-		77		-		-		-		-		77
Substandard		-		-		-		-		-		-		-		-
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		-		386		87		-		-		2,202		15,230		17,905
Total loans	$	143,541	$	671,924	$	821,436	$	156,697	$	235,184	$	808,097	$	425,548	$	3,262,427
Risk Grades:
Pass	$	140,527	$	668,597	$	816,057	$	155,844	$	231,820	$	783,362	$	411,026	$	3,207,233
Special Mention		2,020		3,006		2,554		853		1,969		8,858		9,134		28,394
Substandard		994		321		2,493		-		1,395		15,577		5,239		26,019
Substandard-Nonaccrual		-		-		332		-		-		300		149		781
Grand Total	$	143,541	$	671,924	$	821,436	$	156,697	$	235,184	$	808,097	$	425,548	$	3,262,427

														Revolving
														Loans
		Term Loans Amortized Cost Basis by Originated Period as of December 31, 2022												Amortized
														Cost
	2022		2021		2020		2019		2018		Prior Periods			Basis		Total
	(Dollars in thousands)
Commercial:
Pass	$	102,969	$	36,752	$	24,406	$	19,272	$	12,089	$	21,127	$	293,546	$	510,161
Special Mention		3,408		1,060		192		1,123		-		6,031		5,551		17,365
Substandard		4		-		-		145		-		102		5,496		5,747
Substandard-Nonaccrual		-		279		-		-		330		33		-		642
Total		106,381		38,091		24,598		20,540		12,419		27,293		304,593		533,915
CRE - Owner Occupied:
Pass		92,689		116,266		75,007		59,887		58,180		194,584		8,758		605,371
Special Mention		-		2,033		867		1,120		-		4,410		-		8,430
Substandard		-		660		-		-		193		9		-		862
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		92,689		118,959		75,874		61,007		58,373		199,003		8,758		614,663
CRE - Non-Owner Occupied:
Pass		239,556		278,051		31,848		101,854		63,905		337,048		3,245		1,055,507
Special Mention		-		-		-		-		-		4,883		-		4,883
Substandard		-		-		-		-		-		5,978		-		5,978
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		239,556		278,051		31,848		101,854		63,905		347,909		3,245		1,066,368
Land and construction:
Pass		62,241		72,847		22,459		6,030		-		-		-		163,577
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		62,241		72,847		22,459		6,030		-		-		-		163,577
Home equity:
Pass		-		-		-		-		-		44		117,950		117,994
Special Mention		-		-		-		-		-		-		2,346		2,346
Substandard		-		-		-		-		-		144		142		286
Substandard-Nonaccrual		-		98		-		-		-		-				98
Total		-		98		-		-		-		188		120,438		120,724
Multifamily:
Pass		42,111		69,824		4,871		42,412		15,356		66,380		180		241,134
Special Mention		-		-		657		771		-		2,320		-		3,748
Substandard		-		-		-		-		-		-		-		-
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		42,111		69,824		5,528		43,183		15,356		68,700		180		244,882
Residential mortgage:
Pass		191,907		296,270		1,068		6,788		2,724		33,290		-		532,047
Special Mention		-		-		-		1,058		1,482		2,387		-		4,927
Substandard		-		-		-		-		-		931		-		931
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		191,907		296,270		1,068		7,846		4,206		36,608		-		537,905
Consumer and other:
Pass		389		13		-		-		1,364		1,283		13,647		16,696
Special Mention		-		82		-		6		-		-		249		337
Substandard		-		-		-		-		-		-		-		-
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		389		95		-		6		1,364		1,283		13,896		17,033
Total loans	$	735,274	$	874,235	$	161,375	$	240,466	$	155,623	$	680,984	$	451,110	$	3,299,067
Risk Grades:
Pass	$	731,862	$	870,023	$	159,659	$	236,243	$	153,618	$	653,756	$	437,326	$	3,242,487
Special Mention		3,408		3,175		1,716		4,078		1,482		20,031		8,146		42,036
Substandard		4		660		-		145		193		7,164		5,638		13,804
Substandard-Nonaccrual		-		377		-		-		330		33		-		740
Grand Total	$	735,274	$	874,235	$	161,375	$	240,466	$	155,623	$	680,984	$	451,110	$	3,299,067

		Gross Charge-offs by Originated Period as of March 31, 2023
											2018 and			Revolving
	03/31/2023		12/31/2022		12/31/2021		12/31/2020		12/31/2019		Prior			Loans		Total
	(Dollars in thousands)
Commercial	$	-	$	-	$	-	$	-	$	49	$	85	$	-	$	134
Real estate:
CRE - Owner Occupied		-		-		-		-		-		-		-		-
CRE - Non-Owner Occupied		-		-		-		-		-		-		-		-
Land and construction		-		-		-		-		-		-		-		-
Home equity		-		-		-		-		-		-		246		246
Multifamily		-		-		-		-		-		-		-		-
Residential mortgages		-		-		-		-		-		-		-		-
Consumer and other		-		-		-		-		-		-		-		-
Total	$	-	$	-	$	-	$	-	$	49	$	85	$	246	$	380

Schedule of the amortized cost basis of the loans that were experiencing financial distress and modified

	March 31, 2023
									Combination		Combination
									Term		Term
									Extension		Extension		Total
							Interest		and		and		Class of
	Principal		Payment		Term		Rate		Principal		Interest Rate		Financing
	Forgiveness		Delay		Extension		Reduction		Forgiveness		Reduction		Receivables
	(Dollars in thousands)
Commercial	$	6	$	88	$	36	$	—	$	—	$	—	0.03	%
Total	$	6	$	88	$	36	$	—	$	—	$	—	0.03	%

Schedule of performance of loans that have been modified

	March 31, 2023
	30 - 59		60 - 89		90 Days or
	Days		Days		Greater		Total
	Past Due		Past Due		Past Due		Past Due
	(Dollars in thousands)
Commercial	$	—	$	36	$	6	$	42
Total	$	—	$	36	$	6	$	42

Schedule of financial effect of the loan modification presented of borrowers experiencing financial difficulty

	March 31, 2023
			Weighted	Weighted
			Average	Average
			Interest	Term
	Principal		Rate	Extension
	Forgiveness		Reduction	(Months)
	(Dollars in thousands)
Commercial	$	3	N/A	9
Total	$	3	N/A	9