Loans

9 Months Ended

Sep. 30, 2023

Allowance for Loan Credit Losses

Loans

Note 3— Loans

The following table presents the composition of the Company’s loan portfolio as of September 30, 2023 and December 31, 2022.

(Dollars in thousands)	September 30, 2023		December 31, 2022
Real Estate Loans:
Commercial	$	1,133,069	$	1,118,127
Construction and land development		179,570		195,027
Residential		464,509		426,841
Commercial - Non-Real Estate:
Commercial loans		37,925		44,924
Consumer - Non-Real Estate:
Consumer loans		467		529
Total Gross Loans	$	1,815,540	$	1,785,448
Allowance for loan credit losses		(20,036)		(20,208)
Net deferred loan costs		4,592		4,060
Total net loans	$	1,800,096	$	1,769,300

Portfolio Segments

The Company currently manages its loan products and the respective exposure to credit losses by the following specific portfolio segments which are levels at which the Company develops and documents its systematic methodology to determine the allowance for loan credit losses attributable to each respective portfolio segment. These segments are:

● Real estate - commercial loans – The real estate commercial loans category contains commercial mortgage loans secured by owner occupied, non-owner occupied, and multifamily real estate.

● Real estate - construction and land development loans – The real estate construction and land development loans category contains residential and commercial construction loan financing to builders and developers and to consumers building their own homes.

● Real estate - residential loans – The real estate residential mortgage loans category contains permanent mortgage loans principally to consumers secured by residential real estate.

● Commercial loans – The commercial loans category contains business purpose loans made to provide funds for the financing of equipment, receivables, contract administration expenses, and other general corporate needs of commercial businesses.

● Consumer loans – The consumer loans category contains personal loans such as installment loans and lines of credit.