Loans and Allowance for Credit Losses

12 Months Ended

Dec. 31, 2022

Loans and Leases Receivable Disclosure [Abstract]

Loans and Allowance for Credit Losses

Loans and Leases and Allowance for Credit Losses

Loans and leases are presented in the Consolidated Statements of Financial Condition net of deferred loan fees and costs, and discounts related to purchased loans. Net deferred costs were $5.9 million and $0.8 million as of December 31, 2022 and 2021, respectively, and discounts on purchased loans were $5.4 million and $6.0 million at December 31, 2022 and 2021, respectively. The following table provides outstanding balances related to each of our loan types as of December 31:

	2022		2021
	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,211,706	$	1,173,452
Time and demand	1,023,824		1,159,524
Commercial credit cards	13,920		13,928
Equipment Finance	79,674
Time and demand other	94,288
Real estate construction	513,101		494,456
Construction other	395,439
Construction residential	117,662
Residential real estate	2,194,669		1,920,250
Residential first lien	1,547,192		1,299,534
Residential junior lien/home equity	647,477		620,716
Commercial real estate	2,425,012		2,251,097
Multifamily	431,151		385,432
Nonowner occupied	1,510,347		1,465,247
Owner occupied	483,514		400,418
Loans to individuals	1,297,655		999,975
Automobile and recreational vehicles	1,210,451		901,280
Consumer credit cards	10,657		11,151
Consumer other	76,547		87,544
Total loans and leases	$	7,642,143	$	6,839,230

Commercial, financial, agricultural and other loans at December 31, 2022 and 2021 includes $4.3 million and $71.3 million, respectively, in PPP loans for small businesses who meet the necessary eligibility requirements. PPP loans are 100% guaranteed by the SBA under the CARES Act and are forgivable, in whole or in part, if the proceeds are used for payroll and other permitted purposes in accordance with the PPP requirements. Because PPP loans are fully guaranteed by the SBA, there is no allowance for credit losses recognized for these loans.

First Commonwealth’s loan portfolio includes five primary loan categories. When calculating the allowance for credit losses these categories are classified into fourteen portfolio segments. During 2022, the portfolio loan segments were expanded from eleven to fourteen categories. Loan segments are explained below and all related tables are presented with loan segments considered in each respective period, as this expansion of loan segments is made on a prospective basis in accordance with applicable guidance. The composition of loans by portfolio segment includes;

Commercial, financial, agricultural and other

Time & Demand - Consists primarily of commercial and industrial loans. This category consists of loans that are typically cash flow dependent and therefore have different risk and loss characteristics than other commercial loans. Loans in this category include revolving and term structures with fixed and variable interest rates. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP.

Commercial Credit Cards - Consists of unsecured credit cards for commercial customers. These commercial credit cards have separate characteristics outside of normal commercial non-real estate loans, as they tend to have shorter overall duration. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP.

Equipment Finance - Consists of loans and leases to finance the purchase of equipment for commercial customers. The risk and loss characteristics are unique for this group due to the type of collateral. The primary macroeconomic drivers for estimating

credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP. There were no equipment finance loans or leases in the portfolio prior to the first quarter of 2022.

Time & Demand Other - Consists primarily of loans to state and political subdivisions and other commercial loans that have different characteristics than loans in the Time and Demand category. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of household debt to income and economic conditions measured by GDP. Prior to the first quarter of 2022, these loans were included in the Time and Demand category. The breakout into a separate category is the result of an annual review of loss history and loss drivers used in the allowance for credit losses model.

Real estate construction

Construction Other - Consists of construction loans to commercial builders and developers and are secured by the properties under development.

Construction Residential - Consists of loans to finance the construction of residential properties during the construction period. Borrowers are typically individuals who will occupy the completed single family property.

The risk and loss characteristics of these two construction categories are different than other real estate secured categories due to the collateral being at various stages of completion. The nature of the project and type of borrower of the two construction categories provides for unique risk and loss characteristics for each category. The primary macroeconomic drivers for estimating credit losses for construction loans include forecasts of national unemployment and measures of completed construction projects. Prior to the first quarter of 2022, all construction loans were included in one loan category. The breakout into separate construction categories is the result of an annual review of loss history and loss drivers used in the allowance for credit losses model.

Residential real estate

Residential first lien - Consists of loans with collateral of 1-4 family residencies with a senior lien position. The risk and loss characteristics are unique for this group because the collateral for these loans are the borrower’s primary residence. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and residential property values.

Residential Junior Lien/Home Equity - Consists of loans with collateral of 1-4 family residencies with an open end line of credit or junior lien position. The junior lien position for the majority of these loans provides a higher risk of loss than other residential real estate loans. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and residential property values.

Commercial real estate

Multifamily - Consists of loans secured by commercial multifamily properties. Real estate related to rentals to consumers provide unique risk and loss characteristics. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of commercial real estate values and national unemployment. In the first quarter of 2022, as a result of an annual review of loss history and loss drivers, national unemployment replaced rental vacancy as one of the primary macroeconomic drivers in this category.

Nonowner Occupied - Consists of loans secured by commercial real estate non-owner occupied and provides different loss characteristics than other real estate categories. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP.

Owner Occupied - Consists of loans secured by commercial real estate owner occupied properties. The risk and loss characteristics of this category were considered different than other real estate categories because it is owner occupied and would impact the ability to conduct business. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP.

Loans to individuals

Automobile and recreational vehicles - Consists of both direct and indirect loans with automobiles and recreational vehicles held as collateral. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of consumer sentiment and automobile retention value.

Consumer Credit Cards – Consists of unsecured consumer credit cards The primary macroeconomic drivers for estimating credit losses for this category include forecasts of consumer sentiment and economic conditions measured by GDP.

Other Consumer - Consists of lines of credit, student loans and other consumer loans, not secured by real estate or autos. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of consumer sentiment and retail

sales. In the first quarter of 2022, as a result of an annual review of loss history and loss drivers, retail sales replaced household debt as one of the primary macroeconomic factors for this category.

The allowance for credit losses is calculated by pooling loans of similar credit risk characteristics and applying a discounted cash flow methodology after incorporating probability of default and loss given default estimates. Probability of default represents an estimate of the likelihood of default and loss given default measures the expected loss upon default. Inputs impacting the expected losses include a forecast of macroeconomic factors, using a weighted forecast from a nationally recognized firm. Our model incorporates a one-year forecast of macroeconomic factors, after which the factors revert back to the historical mean over a one-year period. The most significant macroeconomic factor used in estimating credit losses is the national unemployment rate. The forecasted value for national unemployment at the beginning of the forecast period was 3.68% and during the one-year forecast period it was projected to average 4.68%, with a peak of 5.01%.

Credit Quality Information

As part of the on-going monitoring of credit quality within the loan portfolio, the following credit worthiness categories are used in grading our commercial loans:

Pass	Acceptable levels of risk exist in the relationship. Includes all loans not classified as OAEM, substandard or doubtful.
Other Assets Especially Mentioned (OAEM)	Potential weaknesses that deserve management’s close attention. The potential weaknesses may result in deterioration of the repayment prospects or weaken the Bank’s credit position at some future date. The credit risk may be relatively minor, yet constitute an undesirable risk in light of the circumstances surrounding the specific credit. No loss of principal or interest is expected.
Substandard	Well-defined weakness or a weakness that jeopardizes the repayment of the debt. A loan may be classified as substandard as a result of deterioration of the borrower’s financial condition and repayment capacity. Loans for which repayment plans have not been met or collateral equity margins do not protect the Company may also be classified as substandard.
Doubtful	Loans with the characteristics of substandard loans with the added characteristic that collection or liquidation in full, on the basis of presently existing facts and conditions, is highly improbable.

The Company’s internal creditworthiness grading system provides a measurement of credit risk based primarily on an evaluation of the borrower’s cash flow and collateral. Category ratings are reviewed each quarter, at which time management analyzes the results, as well as other external statistics and factors related to loan performance.

The following tables represent our credit risk profile by creditworthiness category for the years ended December 31:

	2022
			Non-Pass
	Pass		OAEM		Substandard		Doubtful		Loss		Total Non-Pass		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,164,193	$	35,389	$	12,124	$	—	$	—	$	47,513	$	1,211,706
Time and demand	976,346		35,389		12,089		—		—		47,478		1,023,824
Commercial credit cards	13,920		—		—		—		—		—		13,920
Equipment Finance	79,674		—		—		—		—		—		79,674
Time and demand other	94,253		—		35		—		—		35		94,288
Real estate construction	513,101		—		—		—		—		—		513,101
Construction other	395,439		—		—		—		—		—		395,439
Construction residential	117,662		—		—		—		—		—		117,662
Residential real estate	2,187,780		736		6,153		—		—		6,889		2,194,669
Residential first lien	1,542,854		675		3,663		—		—		4,338		1,547,192
Residential junior lien/home equity	644,926		61		2,490		—		—		2,551		647,477
Commercial real estate	2,347,000		52,291		25,721		—		—		78,012		2,425,012
Multifamily	430,613		488		50		—		—		538		431,151
Nonowner occupied	1,439,478		49,037		21,832		—		—		70,869		1,510,347
Owner occupied	476,909		2,766		3,839		—		—		6,605		483,514
Loans to individuals	1,297,206		—		449		—		—		449		1,297,655
Automobile and recreational vehicles	1,210,090		—		361		—		—		361		1,210,451
Consumer credit cards	10,657		—		—		—		—		—		10,657
Consumer other	76,459		—		88		—		—		88		76,547
Total	$	7,509,280	$	88,416	$	44,447	$	—	$	—	$	132,863	$	7,642,143

	2021
			Non-Pass
	Pass		OAEM		Substandard		Doubtful		Loss		Total Non-Pass		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,121,234	$	33,765	$	18,453	$	—	$	—	$	52,218	$	1,173,452
Time and demand	1,107,306		33,765		18,453		—		—		52,218		1,159,524
Commercial credit cards	13,928		—		—		—		—		—		13,928
Real estate construction	493,913		498		45		—		—		543		494,456
Residential real estate	1,913,064		976		6,210		—		—		7,186		1,920,250
Residential first lien	1,295,524		905		3,105		—		—		4,010		1,299,534
Residential junior lien/home equity	617,540		71		3,105		—		—		3,176		620,716
Commercial real estate	2,113,123		85,324		52,650		—		—		137,974		2,251,097
Multifamily	355,702		14,565		15,165		—		—		29,730		385,432
Nonowner occupied	1,368,922		63,783		32,542		—		—		96,325		1,465,247
Owner occupied	388,499		6,976		4,943		—		—		11,919		400,418
Loans to individuals	999,770		—		205		—		—		205		999,975
Automobile and recreational vehicles	901,132		—		148		—		—		148		901,280
Consumer credit cards	11,151		—		—		—		—		—		11,151
Consumer other	87,487		—		57		—		—		57		87,544
Total	$	6,641,104	$	120,563	$	77,563	$	—	$	—	$	198,126	$	6,839,230

The following table summarizes the loan risk rating category by loan type including term loans on an amortized cost basis by origination year as of December 31:

	2022
	Term Loans												Revolving Loans
	2022		2021		2020		2019		2018		Prior				Total
	(dollars in thousands)
Time and demand	$	180,134	$	165,064	$	66,006	$	88,959	$	57,030	$	57,907	$	408,724	$	1,023,824
Pass	180,134		154,542		56,592		79,935		56,718		56,309		392,116		976,346
OAEM	—		10,489		8,387		1,846		250		895		13,522		35,389
Substandard	—		33		1,027		7,178		62		703		3,086		12,089
Commercial credit cards	—		—		—		—		—		—		13,920		13,920
Pass	—		—		—		—		—		—		13,920		13,920
Equipment Finance	79,674		—		—		—		—		—		—		79,674
Pass	79,674		—		—		—		—		—		—		79,674
Time and demand other	7,172		20,281		19,626		3,823		2,885		36,197		4,304		94,288
Pass	7,172		20,281		19,626		3,823		2,885		36,162		4,304		94,253
Substandard	—		—		—		—		—		35		—		35
Construction other	81,870		179,919		85,264		23,001		24,005		1,011		369		395,439
Pass	81,870		179,919		85,264		23,001		24,005		1,011		369		395,439
Construction residential	82,829		34,783		—		31		18		—		1		117,662
Pass	82,829		34,783		—		31		18		—		1		117,662
Residential first lien	272,136		507,573		337,995		102,870		69,890		255,573		1,155		1,547,192
Pass	272,136		507,042		337,979		102,097		69,212		253,310		1,078		1,542,854
OAEM	—		164		—		133		51		250		77		675
Substandard	—		367		16		640		627		2,013		—		3,663
Residential junior lien/home equity	77,016		49,273		1,499		2,584		1,683		4,396		511,026		647,477
Pass	77,016		49,273		1,499		2,517		1,683		4,263		508,675		644,926
OAEM	—		—		—		—		—		51		10		61
Substandard	—		—		—		67		—		82		2,341		2,490
Multifamily	140,004		90,868		60,699		39,848		19,914		78,483		1,335		431,151
Pass	140,004		90,868		60,699		39,848		19,914		77,945		1,335		430,613
OAEM	—		—		—		—		—		488		—		488
Substandard	—		—		—		—		—		50		—		50
Nonowner occupied	298,751		153,918		115,947		214,068		141,814		581,060		4,789		1,510,347
Pass	298,751		153,918		115,947		212,588		113,638		541,007		3,629		1,439,478
OAEM	—		—		—		1,480		20,349		26,207		1,001		49,037
Substandard	—		—		—		—		7,827		13,846		159		21,832
Owner occupied	113,010		105,513		56,977		44,430		26,456		131,432		5,696		483,514
Pass	113,010		105,309		55,468		43,014		26,294		128,230		5,584		476,909
OAEM	—		182		745		791		92		923		33		2,766
Substandard	—		22		764		625		70		2,279		79		3,839
Automobile and recreational vehicles	613,513		330,298		172,530		68,996		20,589		4,525		—		1,210,451
Pass	613,513		330,252		172,435		68,865		20,524		4,501		—		1,210,090
Substandard	—		46		95		131		65		24		—		361
Consumer credit cards	—		—		—		—		—		—		10,657		10,657
Pass	—		—		—		—		—		—		10,657		10,657
Consumer other	6,561		17,177		2,489		3,798		1,656		4,085		40,781		76,547
Pass	6,561		17,177		2,489		3,775		1,652		4,085		40,720		76,459
Substandard	—		—		—		23		4		—		61		88
Total	$	1,952,670	$	1,654,667	$	919,032	$	592,408	$	365,940	$	1,154,669	$	1,002,757	$	7,642,143

	2021
	Term Loans												Revolving Loans
	2021		2020		2019		2018		2017		Prior				Total
	(dollars in thousands)
Time and demand	$	281,244	$	126,403	$	143,030	$	91,118	$	45,442	$	111,127	$	361,160	$	1,159,524
Pass	280,854		125,728		128,080		83,204		31,472		102,399		355,569		1,107,306
OAEM	390		596		1,125		7,780		13,945		7,126		2,803		33,765
Substandard	—		79		13,825		134		25		1,602		2,788		18,453
Commercial credit cards	—		—		—		—		—		—		13,928		13,928
Pass	—		—		—		—		—		—		13,928		13,928
Real estate construction	202,016		129,298		123,153		38,267		441		841		440		494,456
Pass	201,992		128,824		123,153		38,267		441		796		440		493,913
OAEM	24		474		—		—		—		—		—		498
Substandard	—		—		—		—		—		45		—		45
Residential first lien	376,106		375,904		126,788		84,484		74,268		260,010		1,974		1,299,534
Pass	376,095		375,885		126,618		84,079		74,135		256,815		1,897		1,295,524
OAEM	—		—		—		67		—		761		77		905
Substandard	11		19		170		338		133		2,434		—		3,105
Residential junior lien/home equity	56,861		1,999		3,322		2,684		1,009		5,348		549,493		620,716
Pass	56,861		1,999		3,246		2,684		1,009		5,195		546,546		617,540
OAEM	—		—		—		—		—		61		10		71
Substandard	—		—		76		—		—		92		2,937		3,105
Multifamily	90,062		73,068		16,782		36,523		63,872		103,774		1,351		385,432
Pass	90,062		73,068		16,782		21,846		49,832		102,761		1,351		355,702
OAEM	—		—		—		—		14,040		525		—		14,565
Substandard	—		—		—		14,677		—		488		—		15,165
Nonowner occupied	194,137		98,840		202,236		173,053		177,295		615,943		3,743		1,465,247
Pass	194,137		98,840		202,236		155,293		152,174		563,743		2,499		1,368,922
OAEM	—		—		—		3,723		19,235		39,737		1,088		63,783
Substandard	—		—		—		14,037		5,886		12,463		156		32,542
Owner occupied	77,710		62,380		53,954		34,115		32,989		134,713		4,557		400,418
Pass	77,710		59,973		51,513		33,623		31,644		129,593		4,443		388,499
OAEM	—		2,194		1,220		492		1,321		1,716		33		6,976
Substandard	—		213		1,221		—		24		3,404		81		4,943
Automobile and recreational vehicles	456,730		252,518		122,943		48,375		17,230		3,484		—		901,280
Pass	456,730		252,518		122,867		48,361		17,224		3,432		—		901,132
Substandard	—		—		76		14		6		52		—		148
Consumer credit cards	—		—		—		—		—		—		11,151		11,151
Pass	—		—		—		—		—		—		11,151		11,151
Consumer other	22,156		4,655		8,030		5,084		542		5,503		41,574		87,544
Pass	22,156		4,655		8,030		5,084		542		5,460		41,560		87,487
Substandard	—		—		—		—		—		43		14		57
Total	$	1,757,022	$	1,125,065	$	800,238	$	513,703	$	413,088	$	1,240,743	$	989,371	$	6,839,230

Portfolio Risks

The credit quality of our loan portfolio can potentially represent significant risk to our earnings, capital and liquidity. First Commonwealth devotes a substantial amount of resources managing this risk primarily through our credit administration department that develops and administers policies and procedures for underwriting, maintaining, monitoring and collecting

loans. Credit administration is independent of lending departments and oversight is provided by the credit committee of the First Commonwealth Board of Directors.

Total gross charge-offs for the years ended December 31, 2022 and 2021 were $9.8 million and $13.1 million, respectively.

Age Analysis of Past Due Loans by Segment

The following tables delineate the aging analysis of the recorded investments in past due loans as of December 31. Also included in these tables are loans that are 90 days or more past due and still accruing because they are well-secured and in the process of collection.

	2022
	30 - 59 days past due		60 - 89 days past due		90 days and greater and still accruing		Nonaccrual		Total past due and nonaccrual		Current		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,233	$	279	$	355	$	2,374	$	4,241	$	1,207,465	$	1,211,706
Time and demand	1,121		270		352		2,374		4,117		1,019,707		1,023,824
Commercial credit cards	27		9		—		—		36		13,884		13,920
Equipment Finance	—		—		—		—		—		79,674		79,674
Time and demand other	85		—		3		—		88		94,200		94,288
Real estate construction	502		—		—		—		502		512,599		513,101
Construction other	—		—		—		—		—		395,439		395,439
Construction residential	502		—		—		—		502		117,160		117,662
Residential real estate	3,023		1,178		811		5,683		10,695		2,183,974		2,194,669
Residential first lien	1,547		771		214		3,369		5,901		1,541,291		1,547,192
Residential junior lien/home equity	1,476		407		597		2,314		4,794		642,683		647,477
Commercial real estate	7,870		25		93		20,539		28,527		2,396,485		2,425,012
Multifamily	202		—		—		—		202		430,949		431,151
Nonowner occupied	7,547		—		92		19,575		27,214		1,483,133		1,510,347
Owner occupied	121		25		1		964		1,111		482,403		483,514
Loans to individuals	3,268		571		732		449		5,020		1,292,635		1,297,655
Automobile and recreational vehicles	2,694		368		295		361		3,718		1,206,733		1,210,451
Consumer credit cards	53		29		5		—		87		10,570		10,657
Consumer other	521		174		432		88		1,215		75,332		76,547
Total	$	15,896	$	2,053	$	1,991	$	29,045	$	48,985	$	7,593,158	$	7,642,143

	2021
	30 - 59 days past due		60 - 89 days past due		90 days and greater and still accruing		Nonaccrual		Total past due and nonaccrual		Current		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	633	$	987	$	155	$	2,006	$	3,781	$	1,169,671	$	1,173,452
Time and demand	605		972		144		2,006		3,727		1,155,797		1,159,524
Commercial credit cards	28		15		11		—		54		13,874		13,928
Real estate construction	813		—		448		45		1,306		493,150		494,456
Residential real estate	3,393		983		218		5,608		10,202		1,910,048		1,920,250
Residential first lien	1,934		354		51		2,706		5,045		1,294,489		1,299,534
Residential junior lien/home equity	1,459		629		167		2,902		5,157		615,559		620,716
Commercial real estate	—		74		—		40,195		40,269		2,210,828		2,251,097
Multifamily	—		—		—		15,097		15,097		370,335		385,432
Nonowner occupied	—		—		—		23,930		23,930		1,441,317		1,465,247
Owner occupied	—		74		—		1,168		1,242		399,176		400,418
Loans to individuals	1,611		417		785		206		3,019		996,956		999,975
Automobile and recreational vehicles	1,228		175		199		148		1,750		899,530		901,280
Consumer credit cards	36		44		63		—		143		11,008		11,151
Consumer other	347		198		523		58		1,126		86,418		87,544
Total	$	6,450	$	2,461	$	1,606	$	48,060	$	58,577	$	6,780,653	$	6,839,230

Nonaccrual Loans

The previous tables summarize nonaccrual loans by loan segment. The Company generally places loans on nonaccrual status when the full and timely collection of interest or principal becomes uncertain, when part of the principal balance has been charged off and no restructuring has occurred, or the loans reach a certain number of days past due. Generally, loans 90 days or more past due are placed on nonaccrual status, except for consumer loans which are placed in nonaccrual status at 150 days past due.

When a loan is placed on nonaccrual, the accrued unpaid interest receivable is reversed against interest income and all future payments received are applied as a reduction to the loan principal. Generally, the loan is returned to accrual status when (a) all delinquent interest and principal become current under the terms of the loan agreement or (b) the loan is both well-secured and in the process of collection and collectability is no longer in doubt.

Nonperforming Loans

Management considers loans to be nonperforming when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. Nonperforming loans includes nonaccrual loans and all troubled debt restructured loans. When management identifies a loan as nonperforming, the credit loss is measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole source or repayment for the loan is the operation or liquidation of collateral. When the loan is collateral dependent, the appraised value less estimated cost to sell is utilized. If management determines the value of the loan is less than the recorded investment in the loan, a credit loss is recognized through an allowance or a charge-off to the allowance for credit losses.

When the ultimate collectability of the total principal of a nonperforming loan is in doubt and the loan is on nonaccrual status, all payments are applied to principal, under the cost recovery method. When the ultimate collectability of the total principal of a nonperforming loan is not in doubt and the loan is on nonaccrual status, contractual interest is credited to interest income when received under the cash basis method.

There were no nonperforming loans held for sale at both December 31, 2022 and 2021. There were no gains on nonperforming loans held for sale during both of the years ended December 31, 2022 and 2020. There was $0.4 million in gains on sale of nonperforming loans recognized during the year ended December 31, 2021.

The following tables include the recorded investment and unpaid principal balance for nonperforming loans with the associated allowance amount, if applicable, as of December 31, 2022 and 2021. Also presented are the average recorded investment in nonperforming loans and the related amount of interest recognized while the loan was considered nonperforming for the years ended December 31, 2022, 2021 and 2020. Average balances are calculated based on month-end balances of the loans for the period reported and are included in the table below based on its period end allowance position.

	2022
	Recorded investment		Unpaid principal balance		Related specific allowance		Average recorded investment		Interest Income Recognized
	(dollars in thousands)
With no related specific allowance recorded:
Commercial, financial, agricultural and other	$	3,141	$	9,555			$	3,751	$	157
Time and demand	3,141		9,555				3,751		157
Equipment Finance	—		—				—		—
Time and demand other	—		—				—		—
Real estate construction	—		—				—		—
Construction other	—		—				—		—
Construction residential	—		—				—		—
Residential real estate	9,145		11,010				9,040		241
Residential first lien	5,754		6,848				5,280		172
Residential junior lien/home equity	3,391		4,162				3,760		69
Commercial real estate	21,505		24,119				22,983		172
Multifamily	—		—				172		43
Nonowner occupied	20,155		22,565				21,304		104
Owner occupied	1,350		1,554				1,507		25
Loans to individuals	528		563				455		16
Automobile and recreational vehicles	440		475				378		16
Consumer other	88		88				77		—
Subtotal	34,319		45,247				36,229		586
With a specific allowance recorded:
Commercial, financial, agricultural and other	$	1,168	$	1,186	$	711	$	261	$	8
Time and demand	1,168		1,186		711		261		8
Equipment Finance	—		—		—		—		—
Time and demand other	—		—		—		—		—
Real estate construction	—		—		—		—		—
Construction other	—		—		—		—		—
Construction residential	—		—		—		—		—
Residential real estate	—		—		—		—		—
Residential first lien	—		—		—		—		—
Residential junior lien/home equity	—		—		—		—		—
Commercial real estate	—		—		—		—		—
Multifamily	—		—		—		—		—
Nonowner occupied	—		—		—		—		—
Owner occupied	—		—		—		—		—
Loans to individuals	—		—		—		—		—
Automobile and recreational vehicles	—		—		—		—		—
Consumer other	—		—		—		—		—
Subtotal	1,168		1,186		711		261		8
Total	$	35,487	$	46,433	$	711	$	36,490	$	594

	2021
	Recorded investment		Unpaid principal balance		Related specific allowance		Average recorded investment		Interest Income Recognized
	(dollars in thousands)
With no related specific allowance recorded:
Commercial, financial, agricultural and other	$	3,720	$	10,303			$	9,240	$	389
Time and demand	3,720		10,303				9,240		389
Real estate construction	45		53				53		—
Residential real estate	9,365		11,294				10,315		375
Residential first lien	5,200		6,337				5,674		279
Residential junior lien/home equity	4,165		4,957				4,641		96
Commercial real estate	40,591		41,525				26,235		119
Multifamily	14,677		14,677				1,223		—
Nonowner occupied	24,581		25,310				22,668		28
Owner occupied	1,333		1,538				2,344		91
Loans to individuals	446		485				479		15
Automobile and recreational vehicles	388		422				425		15
Consumer other	58		63				54		—
Subtotal	54,167		63,660				46,322		898
With a specific allowance recorded:
Commercial, financial, agricultural and other	$	327	$	349	$	307	$	84	$	—
Time and demand	327		349		307		84		—
Real estate construction	—		—		—		—		—
Residential real estate	—		—		—		—		—
Residential first lien	—		—		—		—		—
Residential junior lien/home equity	—		—		—		—		—
Commercial real estate	686		711		88		665		—
Multifamily	421		446		88		444		—
Nonowner occupied	—		—		—		—		—
Owner occupied	265		265		—		221		—
Loans to individuals	—		—		—		—		—
Automobile and recreational vehicles	—		—		—		—		—
Consumer other	—		—		—		—		—
Subtotal	1,013		1,060		395		749		—
Total	$	55,180	$	64,720	$	395	$	47,071	$	898

	2020
	Average recorded investment		Interest Income Recognized
	(dollars in thousands)
With no related specific allowance recorded:
Commercial, financial, agricultural and other	$	6,371	$	80
Time and demand	6,371		80
Real estate construction	146		14
Residential real estate	11,913		335
Residential first lien	6,605		241
Residential junior lien/home equity	5,308		94
Commercial real estate	22,287		184
Multifamily	1		—
Nonowner occupied	18,536		82
Owner occupied	3,750		102
Loans to individuals	470		13
Automobile and recreational vehicles	447		13
Consumer other	23		—
Subtotal	41,187		626
With a specific allowance recorded:
Commercial, financial, agricultural and other	$	1,544	$	3
Time and demand	1,544		3
Real estate construction	—		—
Residential real estate	—		—
Residential first lien	—		—
Residential junior lien/home equity	—		—
Commercial real estate	7,997		10
Multifamily	395		—
Nonowner occupied	7,363		—
Owner occupied	239		10
Loans to individuals	—		—
Automobile and recreational vehicles	—		—
Consumer other	—		—
Subtotal	9,541		13
Total	$	50,728	$	639

Unfunded commitments related to nonperforming loans were $0.2 million at both December 31, 2022 and 2021. After considering the collateral related to these commitments, there was no reserve established as of December 31, 2022 or 2021.

Troubled debt restructured loans are those loans whose terms have been renegotiated to provide a reduction or deferral of principal or interest as a result of the financial difficulties experienced by the borrower, who could not obtain comparable terms from alternate financing sources. Troubled debt restructured loans are considered to be nonperforming loans.

The following table provides detail as to the total troubled debt restructured loans and total commitments outstanding on troubled debt restructured loans as of December 31:

	2022		2021		2020
	(dollars in thousands)
Troubled debt restructured loans
Accrual status	$	6,442	$	7,120	$	8,512
Nonaccrual status	8,852		13,134		14,740
Total	$	15,294	$	20,254	$	23,252
Commitments
Letters of credit	$	60	$	60	$	60
Unused lines of credit	23		16		11
Total	$	83	$	76	$	71

The following tables provide detail, including specific reserve and reasons for modification, related to loans identified as troubled debt restructurings during the years ending December 31:

	2022
		Type of Modification
	Number of Contracts	Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Residential real estate	5	$	—	$	10	$	683	$	693	$	676	$	—
Residential first lien	5	—		10		683		693		676		—
Total	5	$	—	$	10	$	683	$	693	$	676	$	—

	2021
		Type of Modification
	Number of Contracts	Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Commercial, financial, agricultural and other	6	$	—	$	—	$	7,893	$	7,893	$	288	$	—
Time and demand	6	—		—		7,893		7,893		288		—
Residential real estate	15	—		359		301		660		624		—
Residential first lien	12	—		359		171		530		502		—
Residential junior lien/home equity	3	—		—		130		130		122		—
Commercial real estate	2	—		—		644		644		634		—
Nonowner occupied	2	—		—		644		644		634		—
Loans to individuals	7	—		110		63		173		144		—
Automobile and recreational vehicles	7	—		110		63		173		144		—
Total	30	$	—	$	469	$	8,901	$	9,370	$	1,690	$	—

	2020
		Type of Modification
	Number of Contracts	Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Commercial, financial, agricultural and other	4	$	—	$	629	$	2,176	$	2,805	$	2,196	$	636
Time and demand	4	—		629		2,176		2,805		2,196		636
Residential real estate	18	—		33		917		950		791		—
Residential first lien	9	—		33		513		546		411		—
Residential junior lien/home equity	9	—		—		404		404		380		—
Commercial real estate	5	—		—		10,857		10,857		10,758		—
Nonowner occupied	4	—		—		10,289		10,289		10,263		—
Owner occupied	1	—		—		568		568		495		—
Loans to individuals	14	—		114		148		262		224		—
Automobile and recreational vehicles	14	—		114		148		262		224		—
Total	41	$	—	$	776	$	14,098	$	14,874	$	13,969	$	636

The troubled debt restructurings included in the above tables are also included in the nonperforming loan tables provided earlier in this footnote. Loans defined as modified due to a change in rate include loans that were modified for a change in rate as well as a re-amortization of the principal and an extension of the maturity. For the years ended December 31, 2022, 2021 and 2020, $10 thousand, $0.4 million and $0.8 million, respectively, of total rate modifications represent loans with modifications to the rate as well as payment due to re-amortization. In 2022 and 2020, the changes in loan balances between the pre-modification balance and post-modification balance are due to customer payments. For 2021, the change between the pre-modification and post-modification balance for commercial real estate loans is primarily due to the payoff of one large commercial relationship that restructured during the year.

A troubled debt restructuring is considered to be in default when a restructured loan is 90 days or more past due. The following table provides information related to loans that were restructured within the past twelve months and that were considered to be in default during the year ending December 31:

	2022			2021			2020
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	(dollars in thousands)
Commercial, financial, agricultural and other	—	$	—	1	$	223	—	$	—
Time and demand	—	—		1	223		—	—
Residential real estate	—	—		—	—		1	34
Residential junior lien/home equity	—	—		—	—		1	34
Loans to individuals	—	—		1	21		2	74
Automobile and recreational vehicles	—	—		1	21		2	74
Total	—	$	—	2	$	244	3	$	108

The following tables provide detail related to the allowance for credit losses for the years ended December 31.

	2022
	Beginning balance		Charge-offs		Recoveries		Provision (credit)a		Ending balance
	(dollars in thousands)
Commercial, financial, agricultural and other	$	18,093	$	(2,361)	$	394	$	6,524	$	22,650
Time and demand	15,283		(710)		202		5,265		20,040
Commercial credit cards	247		(217)		71		234		335
Equipment Finance	—		—		—		1,086		1,086
Time and demand other	2,563		(1,434)		121		(61)		1,189
Real estate construction	4,220		—		9		4,593		8,822
Construction other	3,278		—		9		3,073		6,360
Construction residential	942		—		—		1,520		2,462
Residential real estate	12,625		(339)		187		8,939		21,412
Residential first liens	7,459		(163)		130		7,396		14,822
Residential junior liens/home equity	5,166		(176)		57		1,543		6,590
Commercial real estate	33,376		(2,487)		769		(2,854)		28,804
Multifamily	3,561		(411)		411		1,165		4,726
Nownowner occupied	24,838		(1,836)		342		(6,918)		16,426
Owner occupied	4,977		(240)		16		2,899		7,652
Loans to individuals	24,208		(4,658)		1,349		319		21,218
Automobile and recreational vehicles	21,392		(2,639)		787		(721)		18,819
Consumer credit cards	496		(486)		75		327		412
Consumer other	2,320		(1,533)		487		713		1,987
Total	$	92,522	$	(9,845)	$	2,708	$	17,521	$	102,906

a) The provision (credit) shown here excludes the provision for off-balance sheet credit exposure included in the income statement.

	December 31, 2022
							Loans
	Ending balance		Ending balance: individually evaluated for credit losses		Ending balance: collectively evaluated for credit losses		Ending balance		Ending balance: individually evaluated for credit losses		Ending balance: collectively evaluated for credit losses
	(dollars in thousands)
Commercial, financial, agricultural and other	$	22,650	$	711	$	21,939	$	1,211,706	$	3,330	$	1,208,376
Time and demand	20,040		711		19,329		1,023,824		3,330		1,020,494
Commercial credit cards	335		—		335		13,920		—		13,920
Equipment Finance	1,086		—		1,086		79,674		—		79,674
Time and demand other	1,189		—		1,189		94,288		—		94,288
Real estate construction	8,822		—		8,822		513,101		—		513,101
Construction other	6,360		—		6,360		395,439		—		395,439
Construction residential	2,462		—		2,462		117,662		—		117,662
Residential real estate	21,412		—		21,412		2,194,669		301		2,194,368
Residential first liens	14,822		—		14,822		1,547,192		301		1,546,891
Residential junior liens/home equity	6,590		—		6,590		647,477		—		647,477
Commercial real estate	28,804		—		28,804		2,425,012		20,583		2,404,429
Multifamily	4,726		—		4,726		431,151		—		431,151
Nownowner occupied	16,426		—		16,426		1,510,347		19,918		1,490,429
Owner occupied	7,652		—		7,652		483,514		665		482,849
Loans to individuals	21,218		—		21,218		1,297,655		—		1,297,655
Automobile and recreational vehicles	18,819		—		18,819		1,210,451		—		1,210,451
Consumer credit cards	412		—		412		10,657		—		10,657
Consumer other	1,987		—		1,987		76,547		—		76,547
Total	$	102,906	$	711	$	102,195	$	7,642,143	$	24,214	$	7,617,929

	2021
	Beginning balance		Charge-offs		Recoveries		Provision (credit)a		Ending balance
	(dollars in thousands)
Commercial, financial, agricultural and other	$	17,187	$	(7,020)	$	2,430	$	5,496	$	18,093
Time and demand	16,838		(6,845)		2,412		5,441		17,846
Commercial credit cards	349		(175)		18		55		247
Real estate construction	7,966		(9)		155		(3,892)		4,220
Residential real estate	14,358		(309)		468		(1,892)		12,625
Residential first liens	7,919		(60)		337		(737)		7,459
Residential junior liens/home equity	6,439		(249)		131		(1,155)		5,166
Commercial real estate	41,953		(1,659)		135		(7,053)		33,376
Multifamily	6,240		(1)		—		(2,678)		3,561
Nownowner occupied	28,414		(1,556)		125		(2,145)		24,838
Owner occupied	7,299		(102)		10		(2,230)		4,977
Loans to individuals	19,845		(4,061)		1,460		6,964		24,208
Automobile and recreational vehicles	16,133		(1,792)		1,016		6,035		21,392
Consumer credit cards	635		(425)		71		215		496
Consumer other	3,077		(1,844)		373		714		2,320
Total	$	101,309	$	(13,058)	$	4,648	$	(377)	$	92,522

a) The provision (credit) shown here excludes the provision for off-balance sheet credit exposure included in the income statement.

	December 31, 2021
							Loans
	Ending balance		Ending balance: individually evaluated for credit losses		Ending balance: collectively evaluated for credit losses		Ending balance		Ending balance: individually evaluated for credit losses		Ending balance: collectively evaluated for credit losses
	(dollars in thousands)
Commercial, financial, agricultural and other	$	18,093	$	307	$	17,786	$	1,173,452	$	3,032	$	1,170,420
Time and demand	17,846		307		17,539		1,159,524		3,032		1,156,492
Commercial credit cards	247		—		247		13,928		—		13,928
Real estate construction	4,220		—		4,220		494,456		—		494,456
Residential real estate	12,625		—		12,625		1,920,250		253		1,919,997
Residential first liens	7,459		—		7,459		1,299,534		—		1,299,534
Residential junior liens/home equity	5,166		—		5,166		620,716		253		620,463
Commercial real estate	33,376		88		33,288		2,251,097		40,246		2,210,851
Multifamily	3,561		88		3,473		385,432		15,097		370,335
Nownowner occupied	24,838		—		24,838		1,465,247		24,205		1,441,042
Owner occupied	4,977		—		4,977		400,418		944		399,474
Loans to individuals	24,208		—		24,208		999,975		—		999,975
Automobile and recreational vehicles	21,392		—		21,392		901,280		—		901,280
Consumer credit cards	496		—		496		11,151		—		11,151
Consumer other	2,320		—		2,320		87,544		—		87,544
Total	$	92,522	$	395	$	92,127	$	6,839,230	$	43,531	$	6,795,699

	2020
	Beginning balance		Impact of adoption of CECL		Charge-offs		Recoveries		Provision (credit)a		Ending balance
	(dollars in thousands)
Commercial, financial, agricultural and other	$	20,234	$	1,478	$	(6,318)	$	314	$	1,479	$	17,187
Time and demand	—		21,242		(6,220)		301		1,515		16,838
Commercial credit cards	—		470		(98)		13		(36)		349
Real estate construction	2,558		562		—		26		4,820		7,966
Residential real estate	4,093		7,276		(1,040)		414		3,615		14,358
Residential first liens	—		7,326		(550)		296		847		7,919
Residential junior liens/home equity	—		4,043		(490)		118		2,768		6,439
Commercial real estate	19,768		(207)		(4,939)		312		27,019		41,953
Multifamily	—		1,647		—		—		4,593		6,240
Nownowner occupied	—		12,317		(4,678)		187		20,588		28,414
Owner occupied	—		5,597		(261)		125		1,838		7,299
Loans to individuals	4,984		4,284		(6,953)		991		16,539		19,845
Automobile	—		6,106		(3,954)		745		13,236		16,133
Consumer credit cards	—		221		(595)		36		973		635
Consumer other	—		2,941		(2,404)		210		2,330		3,077
Total	$	51,637	$	13,393	$	(19,250)	$	2,057	$	53,472	$	101,309

a) The provision (credit) shown here excludes the provision for off-balance sheet credit exposure included in the income statement.

	December 31, 2020
							Loans
	Ending balance		Ending balance: individually evaluated for credit losses		Ending balance: collectively evaluated for credit losses		Ending balance		Ending balance: individually evaluated for credit losses		Ending balance: collectively evaluated for credit losses
	(dollars in thousands)
Commercial, financial, agricultural and other	$	17,187	$	1,268	$	15,919	$	1,555,986	$	5,411	$	1,550,575
Time and demand	16,838		1,268		15,570		1,541,382		5,411		1,535,971
Commercial credit cards	349		—		349		14,604		—		14,604
Real estate construction	7,966		—		7,966		427,221		—		427,221
Residential real estate	14,358		—		14,358		1,750,592		1,105		1,749,487
Residential first liens	7,919		—		7,919		1,144,323		528		1,143,795
Residential junior liens/home equity	6,439		—		6,439		606,269		577		605,692
Commercial real estate	41,953		3,638		38,315		2,211,569		34,947		2,176,622
Multifamily	6,240		116		6,124		371,239		459		370,780
Nownowner occupied	28,414		3,508		24,906		1,421,151		31,450		1,389,701
Owner occupied	7,299		14		7,285		419,179		3,038		416,141
Loans to individuals	19,845		—		19,845		815,815		—		815,815
Automobile	16,133		—		16,133		712,800		—		712,800
Consumer credit cards	635		—		635		12,360		—		12,360
Consumer other	3,077		—		3,077		90,655		—		90,655
Total	$	101,309	$	4,906	$	96,403	$	6,761,183	$	41,463	$	6,719,720