Allowance for Loan Credit Losses (Tables)

3 Months Ended

Mar. 31, 2023

Allowance for Loan Credit Losses

Schedule of allowance for loan losses activity and balance

The following tables present the activity in the allowance for loan credit losses for the three months ended March 31, 2023.

	March 31, 2023
	Real Estate
			Construction &
			Land
Dollars in thousands	Commercial		Development		Residential		Commercial		Consumer		Unallocated		Total
Beginning balance, December 31, 2022	$	13,205	$	2,860	$	3,044	$	456	$	5	$	638	$	20,208
Adjustment to allowance for adoption of ASC 326		(2,649)		476		4,552		367		57		(638)		2,165
Charge-offs		—		—		—		—		—		—		—
Recoveries		—		—		—		1		—		—		1
Provision for (recovery of) credit losses		(742)		(139)		330		(148)		(56)		—		(755)
Ending balance, March 31, 2023	$	9,814	$	3,197	$	7,926	$	676	$	6	$	—	$	21,619

The following table presents the activity for the allowance for loan losses for the three months ended March 31, 2022.

	March 31, 2022
	Real Estate
			Construction &
			Land
Dollars in thousands	Commercial		Development		Residential		Commercial		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning Balance, December 31, 2021	$	13,091	$	2,824	$	2,769	$	711	$	5	$	632	$	20,032
Charge-offs		(1)		—		—		—		—		—		(1)
Recoveries		—		—		—		—		—		—		—
Provision		(694)		922		(12)		(11)		—		(205)		—
Ending Balance, March 31, 2022	$	12,396	$	3,746	$	2,757	$	700	$	5	$	427	$	20,031

The following tables present the balance of the allowance for loan losses, the allowance by impairment methodology, total loans, and loans by impairment methodology as of December 31, 2022 and March 31, 2022, respectively.

	December 31, 2022
	Real Estate
			Construction &
			Land
Dollars in thousands	Commercial		Development		Residential		Commercial		Consumer		Unallocated		Total
Allowance balance attributable to loans:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		13,205		2,860		3,044		456		5		638		20,208
Total allowance	$	13,205	$	2,860	$	3,044	$	456	$	5	$	638	$	20,208
Loans:
Individually evaluated for impairment	$	—	$	—	$	418	$	—	$	—	$	—	$	418
Collectively evaluated for impairment		1,118,127		195,027		426,423		44,924		529		—		1,785,030
Total loans	$	1,118,127	$	195,027	$	426,841	$	44,924	$	529	$	—	$	1,785,448

	March 31, 2022
	Real Estate
			Construction &
			Land
Dollars in thousands	Commercial		Development		Residential		Commercial		Consumer		Unallocated		Total
Allowance balance attributable to loans:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		12,396		3,746		2,757		700		5		427		20,031
Total allowance	$	12,396	$	3,746	$	2,757	$	700	$	5	$	427	$	20,031
Loans:
Individually evaluated for impairment	$	—	$	—	$	542	$	—	$	—	$	—	$	542
Collectively evaluated for impairment		992,126		219,160		355,789		60,350		513		—		1,627,938
Total loans	$	992,126	$	219,160	$	356,331	$	60,350	$	513	$	—	$	1,628,480

Schedule of impaired loans

	December 31, 2022
			Recorded		Recorded
	Unpaid		Investment		Investment		Total				Average		Interest
	Principal		with		with		Recorded		Related		Recorded		Income
(Dollars in thousands)	Balance		No Allowance		Allowance		Investment		Allowance		Investment(1)		Recognized(1)
Real Estate Loans
Commercial	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction and land development		—		—		—		—		—		—		—
Residential		418		418		—		418		—		427		15
Commercial		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—
Total Impaired Loans	$	418	$	418	$	—	$	418	$	—	$	427	$	15

(1) Amounts shown for the twelve-month period ended December 31, 2022.

Schedule of past due and non-accrual loans

	March 31, 2023
	30-59 Days		60-89 Days		90 Days or								90 Days or More
	Past		Past		More		Total Past				Total		Past Due and		Nonaccrual
(Dollars in thousands)	Due		Due		Past Due		Due		Current		Loans		Still Accruing		Loans
Real Estate Loans
Commercial	$	—	$	—	$	—	$	—	$	1,112,905	$	1,112,905	$	—	$	—
Construction and land development		—		—		—		—		179,606		179,606		—		—
Residential		—		—		—		—		433,076		433,076		—		—
Commercial		—		—		—		—		41,339		41,339		—		—
Consumer		—		—		—		—		324		324		—		—
Total Loans	$	—	$	—	$	—	$	—	$	1,767,250	$	1,767,250	$	—	$	—

	December 31, 2022
	30-59 Days		60-89 Days		90 Days or								90 Days or More
	Past		Past		More		Total Past				Total		Past Due and		Nonaccrual
(Dollars in thousands)	Due		Due		Past Due		Due		Current		Loans		Still Accruing		Loans
Real Estate Loans
Commercial	$	—	$	—	$	—	$	—	$	1,118,127	$	1,118,127	$	—	$	—
Construction and land development		—		—		—		—		195,027		195,027		—		—
Residential		—		—		—		—		426,841		426,841		—		—
Commercial		—		—		—		—		44,924		44,924		—		—
Consumer		—		—		—		—		529		529		—		—
Total Loans	$	—	$	—	$	—	$	—	$	1,785,448	$	1,785,448	$	—	$	—

Schedule of credit quality indicators

	Internal
Days Past Due	Risk Rating
0 - 29 days	Pass
30-59 days	Special Mention
60-89 days	Substandard
90-119 days	Doubtful
120+ days	Loss

Schedule of credit quality information

The following table presents the Company’s recorded investment in loans by credit quality indicator by year of origination as of March 31, 2023.

	Term Loans by Year of Origination
Dollars in thousands	2023		2022		2021		2020		2019		Prior		Revolving		Total
Real Estate Loans - Commercial
Pass	$	10,252	$	303,760	$	211,051	$	124,882	$	102,330	$	355,735	$	3,665	$	1,111,675
Special mention		—		—		—		1,230		—		—		—		1,230
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Loss		—		—		—		—		—		—		—		—
Total Real Estate Loans - Commercial	$	10,252	$	303,760	$	211,051	$	126,112	$	102,330	$	355,735	$	3,665	$	1,112,905
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Real Estate Loans - Construction and land development
Pass	$	10,845	$	56,344	$	58,243	$	18,432	$	75	$	9,187	$	24,330	$	177,456
Special mention		—		—		—		—		2,150		—		—		2,150
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Loss		—		—		—		—		—		—		—		—
Total Real Estate Loans - Construction and land development	$	10,845	$	56,344	$	58,243	$	18,432	$	2,225	$	9,187	$	24,330	$	179,606
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Real Estate Loans - Residential
Pass	$	10,964	$	118,138	$	139,709	$	90,868	$	27,676	$	26,994	$	18,727	$	433,076
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Loss		—		—		—		—		—		—		—		—
Total Real Estate Loans - Residential	$	10,964	$	118,138	$	139,709	$	90,868	$	27,676	$	26,994	$	18,727	$	433,076
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial Loans
Pass	$	546	$	7,437	$	2,537	$	3,785	$	5,978	$	6,923	$	14,133	$	41,339
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Loss		—		—		—		—		—		—		—		—
Total Commercial Loans	$	546	$	7,437	$	2,537	$	3,785	$	5,978	$	6,923	$	14,133	$	41,339
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer Loans
Pass	$	17	$	89	$	41	$	111	$	—	$	11	$	55	$	324
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Loss		—		—		—		—		—		—		—		—
Total Consumer Loans	$	17	$	89	$	41	$	111	$	—	$	11	$	55	$	324
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

The following table presents the Company’s recorded investment in loans by credit quality indicators as of December 31, 2022.

	December 31, 2022
			Special								Total
(Dollars in thousands)	Pass		Mention		Substandard		Doubtful		Loss		Loans
Real Estate Loans
Commercial	$	1,116,890	$	1,237	$	—	$	—	$	—	$	1,118,127
Construction and land development		192,877		2,150		—		—		—		195,027
Residential		426,841		—		—		—		—		426,841
Commercial		44,924		—		—		—		—		44,924
Consumer		529		—		—		—		—		529
Total Loans	$	1,782,061	$	3,387	$	—	$	—	$	—	$	1,785,448

Schedule of unfunded commitments

	Allowance for Credit Losses
(Dollars in thousands)	Unfunded Commitments
Beginning balance, December 31, 2022	$	303
Adjustment to allowance for unfunded commitments for adoption of ASC 326		737
Provision for (recovery of) credit losses		(19)
Ending balance, March 31, 2023	$	1,021