XML 34 R23.htm IDEA: XBRL DOCUMENT

Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2021

Amortized Cost and Unpaid Principal Balance of Loans by Loan Segment

The following table presents the Company's loan segments as of December 31, 2020 under the legacy segmentation and the new segmentation under ASU 2016-13:


(In Thousands)			Pre-ASU 2016-13
Commercial loans			$780,058
Real estate construction one-to-four family			38,467
Real estate construction other			80,315
Real estate term owner occupied			163,597
Real estate term non-owner occupied			309,074
Real estate term other			46,620
Consumer secured by 1st deeds of trust			15,585
Consumer other			22,069
Subtotal			1,455,785
Unearned loan fees, net			(11,735)
Total portfolio loans			$1,444,050

			Post-ASU 2016-13
Commercial & industrial loans			$619,304
Commercial real estate:
Owner occupied properties			234,364
Non-owner occupied and multifamily properties			394,860
Residential real estate:
1-4 family residential properties secured by first liens			33,463
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens			18,114
1-4 family residential construction loans			32,760
Other construction, land development and raw land loans			84,352
Obligations of states and political subdivisions in the US			15,274
Agricultural production, including commercial fishing			13,093
Consumer loans			5,794
Other loans			4,407
Subtotal			$1,455,785
Unearned loan fees, net			($11,735)
Total portfolio loans			$1,444,050

The following table presents amortized cost and unpaid principal balance of loans:


	March 31, 2021			December 31, 2020
(In Thousands)	Amortized Cost	Unpaid Principal	Difference	Amortized Cost	Unpaid Principal	Difference
Commercial & industrial loans	$695,797	$708,704	($12,907)	$612,254	$619,304	($7,050)
Commercial real estate:
Owner occupied properties	244,416	245,508	(1,092)	233,320	234,363	(1,043)
Non-owner occupied and multifamily properties	399,982	402,477	(2,495)	392,452	394,860	(2,408)
Residential real estate:
1-4 family residential properties secured by first liens	31,930	32,009	(79)	33,415	33,510	(95)
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	17,536	17,414	122	18,236	18,114	122
1-4 family residential construction loans	35,051	35,280	(229)	32,500	32,760	(260)
Other construction, land development and raw land loans	86,574	87,558	(984)	83,463	84,351	(888)
Obligations of states and political subdivisions in the US	15,795	15,912	(117)	15,318	15,274	44
Agricultural production, including commercial fishing	12,901	12,957	(56)	12,968	13,093	(125)
Consumer loans	5,563	5,522	41	5,734	5,794	(60)
Other loans	3,379	3,394	(15)	4,390	4,407	(17)
Total	1,548,924	1,566,735	(17,811)	1,444,050	1,455,830	(11,780)
Allowance for credit losses	(14,764)			(21,136)
	$1,534,160	$1,566,735	($17,811)	$1,422,914	$1,455,830	($11,780)

Allowance for Credit Losses

The activity in the ACL related to loans held for investment is as follows:


Three Months Ended March 31,	Beginning Balance	Impact of adopting ASC 326	Credit Loss Expense	Charge-offs	Recoveries	Ending Balance
	(In Thousands)
2021
Commercial	$7,973	($7,973)	$—	$—	$—	—
Real estate construction 1-4 family	679	(679)	—	—	—	—
Real estate construction other	1,179	(1,179)	—	—	—	—
Real estate term owner occupied	2,625	(2,625)	—	—	—	—
Real estate term non-owner occupied	5,133	(5,133)	—	—	—	—
Real estate term other	779	(779)	—	—	—	—
Consumer secured by 1st deed of trust	261	(261)	—	—	—	—
Consumer other	400	(400)	—	—	—	—
Unallocated	2,107	(2,107)	—	—	—	—
Commercial & industrial loans	—	4,348	(101)	(163)	185	4,269
Commercial real estate:
Owner occupied properties	—	3,579	(215)	—	2	3,366
Non-owner occupied and multifamily properties	—	4,944	(1,240)	—	—	3,704
Residential real estate:
1-4 family residential properties secured by first liens	—	673	140	—	—	813
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	—	419	(87)	—	10	342
1-4 family residential construction loans	—	454	(194)	—	—	260
Other construction, land development and raw land loans	—	1,994	(173)	—	—	1,821
Obligations of states and political subdivisions in the US	—	44	(8)	—	—	36
Agricultural production, including commercial fishing	—	49	(11)	—	8	46
Consumer loans	—	118	(16)	—	2	104
Other loans	—	3	—	—	—	3
Total	$21,136	($4,511)	($1,905)	($163)	$207	$14,764


Three Months Ended March 31,	Beginning Balance	Provision (benefit)	Charge-offs	Recoveries	Ending Balance
	(In Thousands)
2020
Commercial	$6,604	$1,790	($151)	$26	$8,269
Real estate construction 1-4 family	$643	$—	$—	$—	$643
Real estate construction other	1,017	262	—	—	1,279
Real estate term owner occupied	2,188	242	—	—	2,430
Real estate term non-owner occupied	5,180	311	—	—	5,491
Real estate term other	671	39	—	1	711
Consumer secured by 1st deed of trust	270	4	—	—	274
Consumer other	436	24	(14)	7	453
Unallocated	2,079	(612)	—	—	1,467
Total	$19,088	$2,060	($165)	$34	$21,017

The following table presents loans individually and collectively evaluated for impairment and their respective allowance for credit loss allocations as of December 31, 2020, as determined in accordance with ASC 310 prior to the adoption of ASU 2016-13:


(In Thousands)	Loan Evaluation			ALLL Allocations
	Individually	Collectively	Total	Individually	Collectively	Total

Commercial	$7,786	$764,682	$772,468	$13	$7,960	$7,973
Real estate construction 1-4 family	702	$37,478	38,180	—	679	679
Real estate construction other	—	$79,403	79,403	—	1,179	1,179
Real estate term owner occupied	6,962	$155,762	162,724	—	2,625	2,625
Real estate term non-owner occupied	770	$306,477	307,247	—	5,133	5,133
Real estate term other	1,467	$44,763	46,230	—	779	779
Consumer secured by 1st deed of trust	259	$15,289	15,548	—	261	261
Consumer other	82	$22,168	22,250	—	400	400
Unallocated	—	—	—	—	2,107	2,107
Total	$18,028	$1,426,022	$1,444,050	$13	$21,123	$21,136

Information Pertaining to Impaired Loans Prior to the Adoption of ASU 2016-13

The following table presents information pertaining to impaired loans as of December 31, 2020, as determined in accordance with ASC 310 prior to the adoption of ASU 2016-13:


	Impaired Loans With a Valuation Allowance			Impaired Loans Without a Valuation Allowance
(In Thousands)	Recorded Investment	Unpaid Principal	Related Allowance	Recorded Investment	Unpaid Principal

Commercial	$308	$308	$13	$7,478	$8,287
Real estate construction 1-4 family	—	—	—	702	702
Real estate construction other	—	—	—	—	—
Real estate term owner occupied	—	—	—	6,962	7,047
Real estate term non-owner occupied	—	—	—	771	771
Real estate term other	—	—	—	1,467	1,467
Consumer secured by 1st deed of trust	—	—	—	258	258
Consumer other	—	—	—	82	87
Total	$308	$308	$13	$17,720	$18,619

The following table presents average impaired loans information, as determined in accordance with ASC 310 prior to the adoption of ASU 2016-13, and interest recognized on such loans, for the quarter ended March 31, 2020:


	Three Months Ended March 31, 2020
(In Thousands)	Average Impaired Loans	Interest Recognized
Commercial	$13,430	$30
Real estate construction 1-4 family	1,132	—
Real estate construction other	—	—
Real estate term owner occupied	6,047	28
Real estate term non-owner occupied	177	3
Real estate term other	1,583	7
Consumer secured by 1st deed of trust	279	5
Consumer other	89	—
Total	$22,737	$73

Portfolio of Risk-rated Loans by Grade and by Year of Origination

The following tables present the Company's portfolio of risk-rated loans by grade and by year of origination. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal of loan constitutes a current period origination. Generally, current period renewals of credit are re-underwritten at the point of renewal and considered current period originations for purposes of the table below.


March 31, 2021	2021	2020	2019	2018	2017	Prior	Total
	(In Thousands)
Commercial & industrial loans
Pass	$218,186	$275,982	$50,311	$57,447	$26,348	$50,851	$679,125
Classified	—	344	3,700	3,857	987	7,784	16,672
Total commercial & industrial loans	$218,186	$276,326	$54,011	$61,304	$27,335	$58,635	$695,797

Commercial real estate:


Owner occupied properties
Pass	$24,861	$88,524	$26,541	$13,740	$15,422	$65,601	$234,689
Classified	—	1,497	—	558	—	7,672	9,727
Total commercial real estate owner occupied properties	$24,861	$90,021	$26,541	$14,298	$15,422	$73,273	$244,416

Non-owner occupied and multifamily properties
Pass	$20,619	$73,970	$57,563	$34,907	$20,746	$181,695	$389,500
Classified	—	—	—	—	10,482	—	10,482
Total commercial real estate non-owner occupied and multifamily properties	$20,619	$73,970	$57,563	$34,907	$31,228	$181,695	$399,982

Residential real estate:
1-4 family residential properties secured by first liens
Pass	$2,362	$11,563	$4,506	$891	$1,849	$8,390	$29,561
Classified	—	1,629	509	—	—	231	2,369
Total residential real estate 1-4 family residential properties secured by first liens	$2,362	$13,192	$5,015	$891	$1,849	$8,621	$31,930

1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens
Pass	$916	$2,625	$4,089	$3,950	$390	$5,327	$17,297
Classified	—	—	—	220	—	19	239
Total residential real estate 1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	$916	$2,625	$4,089	$4,170	$390	$5,346	$17,536

1-4 family residential construction loans
Pass	$6,145	$13,199	$5,253	$132	$99	$9,513	$34,341
Classified	—	593	—	—	117	—	710
Total residential real estate 1-4 family residential construction loans	$6,145	$13,792	$5,253	$132	$216	$9,513	$35,051

Other construction, land development and raw land loans
Pass	$2,198	$24,279	$40,155	$8,510	$156	$5,528	$80,826
Classified	—	—	—	4,200	—	1,548	5,748
Total other construction, land development and raw land loans	$2,198	$24,279	$40,155	$12,710	$156	$7,076	$86,574

Obligations of states and political subdivisions in the US
Pass	$—	$1,289	$3,150	$432	$2,755	$8,169	$15,795
Classified	—	—	—	—	—	—	—
Total obligations of states and political subdivisions in the US	$—	$1,289	$3,150	$432	$2,755	$8,169	$15,795

Agricultural production, including commercial fishing
Pass	$106	$7,356	$1,237	$1,321	$830	$2,051	$12,901
Classified	—	—	—	—	—	—	—
Total agricultural production, including commercial fishing	$106	$7,356	$1,237	$1,321	$830	$2,051	$12,901

Consumer loans
Pass	$179	$1,193	$991	$534	$380	$2,284	$5,561
Classified	—	2	—	—	—	—	2
Total consumer loans	$179	$1,195	$991	$534	$380	$2,284	$5,563

Other loans
Pass	$—	$1,761	$452	$299	$—	$867	$3,379
Classified	—	—	—	—	—	—	—
Total other loans	$—	$1,761	$452	$299	$—	$867	$3,379

Total loans
Pass	$275,572	$501,741	$194,248	$122,163	$68,975	$340,276	$1,502,975
Classified	—	4,065	4,209	8,835	11,586	17,254	45,949
Total loans	$275,572	$505,806	$198,457	$130,998	$80,561	$357,530	$1,548,924

Total pass loans	$275,572	$501,741	$194,248	$122,163	$68,975	$340,276	$1,502,975


Government guarantees	(204,708)	(214,883)	(15,208)	(3,643)	(371)	(6,755)	(445,568)
Total pass loans, net of government guarantees	$70,864	$286,858	$179,040	$118,520	$68,604	$333,521	$1,057,407

Total classified loans	$—	$4,065	$4,209	$8,835	$11,586	$17,254	$45,949
Government guarantees	—	(1,347)	(21)	—	(9,730)	(3,320)	(14,418)
Total classified loans, net government guarantees	$—	$2,718	$4,188	$8,835	$1,856	$13,934	$31,531

The following table presents the Company's portfolio of risk-rated loans by grade as of December 31, 2020:


	Pass	Classified	Total
	(In Thousands)
December 31, 2020
Commercial	$758,362	$14,106	$772,468
Real estate construction 1-4 family	37,093	1,087	38,180
Real estate construction other	79,403	—	79,403
Real estate term owner occupied	152,734	9,990	162,724
Real estate term non-owner occupied	289,555	17,692	307,247
Real estate term other	42,900	3,330	46,230
Consumer secured by 1st deed of trust	15,404	144	15,548
Consumer other	22,144	106	22,250
Portfolio loans	1,397,595	46,455	1,444,050
Government guarantees	(334,639)	(14,587)	(349,226)
Portfolio loans, net of government guarantees	$1,062,956	$31,868	$1,094,824

Aging of Contractually Past Due Loans

Past Due Loans: The following tables present an aging of contractually past due loans:


(In Thousands)	30-59 Days Past Due	60-89 Days Past Due	Greater Than 90 Days Past Due	Total Past Due	Current	Total	Greater Than 90 Days Past Due Still Accruing
March 31, 2021
Commercial & industrial loans	$141	$—	$1,322	$1,463	$694,334	$695,797	$—
Commercial real estate:
Owner occupied properties	—	—	1,501	1,501	242,915	244,416	—
Non-owner occupied and multifamily properties	—	—	—	—	399,982	399,982	—
Residential real estate:
1-4 family residential properties secured by first liens	—	—	—	—	31,930	31,930	—
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	45	42	139	226	17,310	17,536	—
1-4 family residential construction loans	526	—	117	643	34,408	35,051	—
Other construction, land development and raw land loans	—	—	1,545	1,545	85,029	86,574	—
Obligations of states and political subdivisions in the US	—	—	—	—	15,795	15,795	—
Agricultural production, including commercial fishing	—	—	—	—	12,901	12,901	—
Consumer loans	—	—	—	—	5,563	5,563	—
Other loans	—	—	—	—	3,379	3,379	—
Total	$712	$42	$4,624	$5,378	$1,543,546	$1,548,924	$—
December 31, 2020
Commercial & industrial loans	$242	$229	$2,675	$3,146	$609,108	$612,254	$—
Commercial real estate:
Owner occupied properties	2,203	—	2,459	4,662	228,658	233,320	449
Non-owner occupied and multifamily properties	—	—	—	—	392,452	392,452	—
Residential real estate:
1-4 family residential properties secured by first liens	446	—	—	446	32,969	33,415	—
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	38	—	139	177	18,059	18,236	—
1-4 family residential construction loans	—	—	702	702	31,798	32,500	—
Other construction, land development and raw land loans	—	—	1,545	1,545	81,918	83,463	—
Obligations of states and political subdivisions in the US	—	—	—	—	15,318	15,318	—
Agricultural production, including commercial fishing	—	—	—	—	12,968	12,968	—
Consumer loans	—	—	272	272	5,462	5,734	—
Other loans	—	—	—	—	4,390	4,390	—
Total	$2,929	$229	$7,792	$10,950	$1,433,100	$1,444,050	$449

Loans on Nonaccrual Status

The following table presents loans on nonaccrual status and loan on nonaccrual status for which there was no related allowance for credit losses:


	March 31, 2021		December 31, 2020
(In Thousands)	Nonaccrual	Nonaccrual With No ACL	Nonaccrual	Nonaccrual With No ACL

Commercial & industrial loans	$6,212	$2,300	$3,848	$3,513
Commercial real estate:
Owner occupied properties	4,056	4,016	4,620	4,582

Residential real estate:
1-4 family residential properties secured by first liens	2,292	154	160	160
1-4 family residential properties secured by junior liens and revolving secured by 1-4 family first liens	239	220	242	221
1-4 family residential construction loans	117	117	702	702
Other construction, land development and raw land loans	1,545	1,545	1,545	1,545


Consumer loans	2	—	3	—

Total nonperforming loans	14,463	8,352	11,120	10,723
Government guarantees on nonaccrual loans	(1,382)	(1,350)	(1,483)	(1,483)
Net nonaccrual loans	$13,081	$7,002	$9,637	$9,240

Non Troubled Debt Restructuring

As of March 31, 2021, the Company has made the following types of loan modifications related to COVID-19, which are not classified as TDRs with principal balance outstanding of:


(Dollars in thousands)	Interest Only	Full Payment Deferral	Total
Portfolio loans	$65,201	$23,096	$88,297
Number of modifications	21	9	30

Troubled Debt Restructured Loans


		March 31, 2020
	Number of Contracts	Rate Modification	Term Modification	Payment Modification	Combination Modification	Total Modifications
(In Thousands)
Pre-Modification Outstanding Recorded Investment:
Commercial - AQR substandard	1	$—	$3,249	$—	$—	$3,249
Total	1	$—	$3,249	$—	$—	$3,249
Post-Modification Outstanding Recorded Investment:
Commercial - AQR substandard	1	$—	$3,281	$—	$—	$3,281
Total	1	$—	$3,281	$—	$—	$3,281