Loans and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2023

Loans and Leases Receivable Disclosure [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure

Loans and Leases and Allowance for Credit Losses

Loans and leases are presented in the Consolidated Statements of Financial Condition net of deferred fees and costs, and discounts related to purchased loans. Net deferred fees were $7.4 million and $5.9 million as of June 30, 2023 and December 31, 2022, respectively, and discounts on purchased loans from acquisitions were $30.1 million and $5.4 million as of June 30, 2023 and December 31, 2022, respectively. The following table provides outstanding balances related to each of our loan types:

 

	June 30, 2023		December 31, 2022
	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,501,994	$	1,211,706
Time and demand	1,229,231		1,023,824
Commercial credit cards	13,119		13,920
Equipment finance	154,152		79,674
Time and demand other	105,492		94,288
Real estate construction	574,799		513,101
Construction other	474,720		395,439
Construction residential	100,079		117,662
Residential real estate	2,364,109		2,194,669
Residential first lien	1,694,744		1,547,192
Residential junior lien/home equity	669,365		647,477
Commercial real estate	3,004,962		2,425,012
Multifamily	515,875		431,151
Nonowner occupied	1,815,364		1,510,347
Owner occupied	673,723		483,514
Loans to individuals	1,353,972		1,297,655
Automobile and recreational vehicles	1,272,557		1,210,451
Consumer credit cards	9,943		10,657
Consumer other	71,472		76,547
Total loans and leases	$	8,799,836	$	7,642,143

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. 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. At June 30, 2023 and December 31, 2022, this category includes $2.9 million and $4.3 million in Paycheck Protection Program ("PPP") loans for small businesses. Because PPP loans are fully guaranteed by the SBA, there is no allowance for credit losses recognized for these loans.

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.

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.

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.

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.

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.

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 3.52% and during the one-year forecast period it was projected to average 4.47%, with a peak of 4.83%.

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 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 Company’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:

	June 30, 2023
			Non-Pass
	Pass		OAEM		Substandard		Doubtful		Loss		Total Non-Pass		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,390,575	$	69,846	$	41,573	$	—	$	—	$	111,419	$	1,501,994
Time and demand	1,117,957		69,846		41,428		—		—		111,274		1,229,231
Commercial credit cards	13,119		—		—		—		—		—		13,119
Equipment finance	154,028		—		124		—		—		124		154,152
Time and demand other	105,471		—		21		—		—		21		105,492
Real estate construction	573,123		1,676		—		—		—		1,676		574,799
Construction other	473,044		1,676		—		—		—		1,676		474,720
Construction residential	100,079		—		—		—		—		—		100,079
Residential real estate	2,354,041		2,091		7,977		—		—		10,068		2,364,109
Residential first lien	1,688,793		2,091		3,860		—		—		5,951		1,694,744
Residential junior lien/home equity	665,248		—		4,117		—		—		4,117		669,365
Commercial real estate	2,921,522		57,039		26,401		—		—		83,440		3,004,962
Multifamily	515,296		470		109		—		—		579		515,875
Nonowner occupied	1,760,549		32,010		22,805		—		—		54,815		1,815,364
Owner occupied	645,677		24,559		3,487		—		—		28,046		673,723
Loans to individuals	1,353,504		—		468		—		—		468		1,353,972
Automobile and recreational vehicles	1,272,207		—		350		—		—		350		1,272,557
Consumer credit cards	9,943		—		—		—		—		—		9,943
Consumer other	71,354		—		118		—		—		118		71,472
Total loans and leases	$	8,592,765	$	130,652	$	76,419	$	—	$	—	$	207,071	$	8,799,836

 

	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 loans and leases	$	7,509,280	$	88,416	$	44,447	$	—	$	—	$	132,863	$	7,642,143

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

	June 30, 2023
	Term Loans												Revolving Loans
	2023		2022		2021		2020		2019		Prior				Total
	(dollars in thousands)
Time and demand	$	86,981	$	222,631	$	159,642	$	75,577	$	73,505	$	87,805	$	523,090	$	1,229,231
Pass	86,390		208,288		141,792		64,392		61,428		81,859		473,808		1,117,957
OAEM	—		9,190		10,021		2,271		5,250		1,493		41,621		69,846
Substandard	591		5,153		7,829		8,914		6,827		4,453		7,661		41,428
Gross charge-offs	—		—		—		—		(2,312)		(522)		(3,636)		(6,470)
Gross recoveries	—		—		—		53		4		106		5		168
Commercial credit cards	—		—		—		—		—		—		13,119		13,119
Pass	—		—		—		—		—		—		13,119		13,119
Gross charge-offs	—		—		—		—		—		—		(35)		(35)
Gross recoveries	—		—		—		—		—		—		7		7

	June 30, 2023
	Term Loans						Revolving Loans
	2023	2022	2021	2020	2019	Prior		Total
	(dollars in thousands)
Equipment finance	82,329	71,823	—	—	—	—	—	154,152
Pass	82,329	71,699	—	—	—	—	—	154,028
Substandard	—	124	—	—	—	—	—	124
Gross charge-offs	—	(45)	—	—	—	—	—	(45)
Gross recoveries	—	—	—	—	—	—	—	—
Time and demand other	1,954	6,458	18,254	20,143	3,368	49,337	5,978	105,492
Pass	1,954	6,458	18,254	20,143	3,368	49,316	5,978	105,471
Substandard	—	—	—	—	—	21	—	21
Gross charge-offs	—	—	—	—	—	—	(790)	(790)
Gross recoveries	—	—	—	—	—	—	79	79
Construction other	26,406	150,560	210,341	51,140	21,686	14,226	361	474,720
Pass	26,406	150,560	208,665	51,140	21,686	14,226	361	473,044
OAEM	—	—	1,676	—	—	—	—	1,676
Gross charge-offs	—	—	—	—	—	—	—	—
Gross recoveries	—	—	—	—	—	—	—	—
Construction residential	7,649	79,708	2,752	5,593	3,549	—	828	100,079
Pass	7,649	79,708	2,752	5,593	3,549	—	828	100,079
Gross charge-offs	—	—	—	—	—	—	—	—
Gross recoveries	—	—	—	—	—	—	—	—
Residential first lien	63,442	333,721	548,684	331,918	100,996	313,784	2,199	1,694,744
Pass	63,438	333,721	546,717	331,828	100,189	310,968	1,932	1,688,793
OAEM	—	—	1,556	—	127	331	77	2,091
Substandard	4	—	411	90	680	2,485	190	3,860
Gross charge-offs	—	(1)	—	(4)	(1)	(11)	—	(17)
Gross recoveries	—	—	—	—	—	43	—	43
Residential junior lien/home equity	29,270	74,900	47,459	2,031	2,777	5,983	506,945	669,365
Pass	29,270	74,900	47,459	2,031	2,715	5,907	502,966	665,248
Substandard	—	—	—	—	62	76	3,979	4,117
Gross charge-offs	—	—	—	—	—	—	(63)	(63)
Gross recoveries	—	—	—	—	—	—	28	28
Multifamily	3,346	155,372	122,015	91,119	32,161	110,074	1,788	515,875
Pass	3,346	155,372	122,015	91,119	32,161	109,495	1,788	515,296
OAEM	—	—	—	—	—	470	—	470
Substandard	—	—	—	—	—	109	—	109
Gross charge-offs	—	—	—	—	—	—	—	—
Gross recoveries	—	—	—	—	—	—	—	—
Nonowner occupied	121,605	414,983	167,587	164,734	233,055	703,777	9,623	1,815,364
Pass	121,605	414,501	167,587	156,955	231,429	658,914	9,558	1,760,549
OAEM	—	—	—	7,779	1,468	22,763	—	32,010
Substandard	—	482	—	—	158	22,100	65	22,805
Gross charge-offs	—	—	—	—	—	—	—	—
Gross recoveries	—	—	—	—	—	124	—	124
Owner occupied	41,099	153,235	139,364	89,967	64,318	176,186	9,554	673,723
Pass	41,099	152,637	137,735	85,417	46,209	173,102	9,478	645,677
OAEM	—	598	1,007	3,801	17,454	1,666	33	24,559
Substandard	—	—	622	749	655	1,418	43	3,487
Gross charge-offs	—	—	—	—	—	(1,517)	—	(1,517)
Gross recoveries	—	—	—	—	—	12	—	12

	June 30, 2023
	Term Loans												Revolving Loans
	2023		2022		2021		2020		2019		Prior				Total
	(dollars in thousands)
Automobile and recreational vehicles	255,446		533,069		278,997		141,368		50,595		13,082		—		1,272,557
Pass	255,446		533,069		278,957		141,226		50,490		13,019		—		1,272,207
Substandard	—		—		40		142		105		63		—		350
Gross charge-offs	—		(638)		(361)		(321)		(194)		(72)		—		(1,586)
Gross recoveries	—		111		106		212		196		77		—		702
Consumer credit cards	—		—		—		—		—		—		9,943		9,943
Pass	—		—		—		—		—		—		9,943		9,943
Gross charge-offs	—		—		—		—		—		—		(146)		(146)
Gross recoveries	—		—		—		—		—		—		47		47
Consumer other	3,454		5,453		15,024		1,964		2,236		4,175		39,166		71,472
Pass	3,454		5,453		15,024		1,964		2,209		4,171		39,079		71,354
Substandard	—		—		—		—		27		4		87		118
Gross charge-offs	—		(75)		(27)		(6)		(77)		(11)		(361)		(557)
Gross recoveries	—		49		1		5		26		32		65		178
Total loans and leases	$	722,981	$	2,201,913	$	1,710,119	$	975,554	$	588,246	$	1,478,429	$	1,122,594	$	8,799,836
Total charge-offs	—		(759)		(388)		(331)		(2,584)		(2,133)		(5,031)		(11,226)
Total recoveries	—		160		107		270		226		394		231		1,388

	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 loans and leases	$	1,952,670	$	1,654,667	$	919,032	$	592,408	$	365,940	$	1,154,669	$	1,002,757	$	7,642,143

Portfolio Risks

The credit quality of our loan portfolio can potentially represent significant risk to our earnings, capital and liquidity. First Commonwealth devotes substantial resources to 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 net charge-offs for the six months ended June 30, 2023 and 2022 were $9.8 million and $2.7 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 June 30, 2023 and December 31, 2022. 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.

	June 30, 2023
	30 - 59 days past due		60 - 89 days past due		90 days or greater and still accruing		Nonaccrual		Total past due and nonaccrual		Current		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,680	$	433	$	547	$	17,030	$	19,690	$	1,482,304	$	1,501,994
Time and demand	1,452		429		546		16,907		19,334		1,209,897		1,229,231
Commercial credit cards	54		4		—		—		58		13,061		13,119
Equipment finance	169		—		—		123		292		153,860		154,152
Time and demand other	5		—		1		—		6		105,486		105,492
Real estate construction	280		—		—		—		280		574,519		574,799
Construction other	280		—		—		—		280		474,440		474,720
Construction residential	—		—		—		—		—		100,079		100,079
Residential real estate	3,287		1,299		1,350		7,502		13,438		2,350,671		2,364,109
Residential first lien	1,973		876		827		3,548		7,224		1,687,520		1,694,744
Residential junior lien/home equity	1,314		423		523		3,954		6,214		663,151		669,365
Commercial real estate	4,525		154		—		23,009		27,688		2,977,274		3,004,962
Multifamily	—		—		—		68		68		515,807		515,875
Nonowner occupied	3,945		—		—		20,649		24,594		1,790,770		1,815,364
Owner occupied	580		154		—		2,292		3,026		670,697		673,723
Loans to individuals	3,396		639		577		468		5,080		1,348,892		1,353,972
Automobile and recreational vehicles	2,956		352		328		350		3,986		1,268,571		1,272,557
Consumer credit cards	45		13		—		—		58		9,885		9,943
Consumer other	395		274		249		118		1,036		70,436		71,472
Total loans and leases	$	13,168	$	2,525	$	2,474	$	48,009	$	66,176	$	8,733,660	$	8,799,836

 

	December 31, 2022
	30 - 59 days past due		60 - 89 days past due		90 days or 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 loans and leases	$	15,896	$	2,053	$	1,991	$	29,045	$	48,985	$	7,593,158	$	7,642,143

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 on 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 becomes 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. 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 for repayment of 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 that the value of the loan is less than the recorded investment in the loan, a credit loss is recognized through an allowance estimate 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.

At June 30, 2023 and December 31, 2022, there were no nonperforming loans held for sale. During both the six months ended June 30, 2023 and 2022, there were no gains recognized on the sale of nonperforming loans.

The following tables include the recorded investment and unpaid principal balance for nonperforming loans with the associated allowance amount, if applicable, as of June 30, 2023 and December 31, 2022. Also presented are the average recorded investment in nonperforming loans and the related amount of interest recognized while the loan was considered nonperforming. Average balances are calculated using month-end balances of the loans for the period reported and are included in the table below based on their period-end allowance position. The increase in nonperforming loans is primarily a result of $18.7 million in loans acquired from Centric, offset by the removal of $6.4 million in accruing troubled debt restructurings ("TDR's"). The TDR's were eliminated as a result of our adoption of ASU 2022-02, Financial Instruments Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02"). This standard was adopted on January 1, 2023 and eliminates the accounting guidance for TDR's while enhancing disclosure requirements for loan modifications for borrowers experiencing financial difficulty.

	June 30, 2023						December 31, 2022
	Recorded investment		Unpaid principal balance		Related allowance		Recorded investment		Unpaid principal balance		Related allowance
	(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other	$	1,878	$	10,270			$	3,141	$	9,555
Time and demand	1,755		10,147				3,141		9,555
Equipment finance	123		123				—		—
Time and demand other	—		—				—		—
Real estate construction	—		—				—		—
Construction other	—		—				—		—
Construction residential	—		—				—		—
Residential real estate	6,266		8,071				9,145		11,010
Residential first lien	3,548		4,618				5,754		6,848
Residential junior lien/home equity	2,718		3,453				3,391		4,162
Commercial real estate	22,409		24,509				21,505		24,119
Multifamily	68		68				—		—
Nonowner occupied	20,649		22,931				20,155		22,565
Owner occupied	1,692		1,510				1,350		1,554
Loans to individuals	468		535				528		563
Automobile and recreational vehicles	350		418				440		475
Consumer other	118		117				88		88
Subtotal	31,021		43,385				34,319		45,247
With an allowance recorded:
Commercial, financial, agricultural and other	15,152		15,826		$	12,404	1,168		1,186		$	711
Time and demand	15,152		15,826		12,404		1,168		1,186		711
Equipment finance	—		—		—		—		—		—
Time and demand other	—		—		—		—		—		—
Real estate construction	—		—		—		—		—		—
Construction other	—		—		—		—		—		—
Construction residential	—		—		—		—		—		—
Residential real estate	1,236		1,406		103		—		—		—
Residential first lien	—		—		—		—		—		—
Residential junior lien/home equity	1,236		1,406		103		—		—		—
Commercial real estate	600		620		63		—		—		—
Multifamily	—		—		—		—		—		—
Nonowner occupied	—		—		—		—		—		—
Owner occupied	600		620		63		—		—		—
Loans to individuals	—		—		—		—		—		—
Automobile and recreational vehicles	—		—		—		—		—		—
Consumer other	—		—		—		—		—		—
Subtotal	16,988		17,852		12,570		1,168		1,186		711
Total	$	48,009	$	61,237	$	12,570	$	35,487	$	46,433	$	711

	For the Six Months Ended June 30,
	2023				2022
	Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized
	(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other	$	4,444	$	(10)	$	3,883	$	50
Time and demand	4,283		(10)		3,883		50
Equipment finance	161		—		—		—
Time and demand other	—		—		—		—
Real estate construction	—		—		—		—
Construction other	—		—		—		—
Construction residential	—		—		—		—
Residential real estate	6,190		40		8,985		141
Residential first lien	3,510		40		5,080		105
Residential junior lien/home equity	2,680		—		3,905		36
Commercial real estate	22,769		(43)		16,933		63
Multifamily	11		—		344		—
Nonowner occupied	20,565		4		14,986		52
Owner occupied	2,193		(47)		1,603		11
Loans to individuals	443		1		432		8
Automobile and recreational vehicles	355		1		361		8
Consumer other	88		—		71		—
Subtotal	33,846		(12)		30,233		262
With an allowance recorded:
Commercial, financial, agricultural and other	8,056		—		—		—
Time and demand	8,056		—		—		—
Equipment finance	—		—		—		—
Time and demand other	—		—		—		—
Real estate construction	—		—		—		—
Construction other	—		—		—		—
Construction residential	—		—		—		—
Residential real estate	1,030		—		—		—
Residential first lien	—		—		—		—
Residential junior lien/home equity	1,030		—		—		—
Commercial real estate	100		—		7,024		—
Multifamily	—		—		—		—
Nonowner occupied	—		—		7,024		—
Owner occupied	100		—		—		—
Loans to individuals	—		—		—		—
Automobile and recreational vehicles	—		—		—		—
Consumer other	—		—		—		—
Subtotal	9,186		—		7,024		—
Total	$	43,032	$	(12)	$	37,257	$	262

	For the Three Months Ended June 30,
	2023				2022
	Average recorded investment		Interest income recognized			Average recorded investment		Interest Income Recognized
	(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other	$	4,416	$	(10)		$	3,822	$	27
Time and demand	4,332		(10)			3,822		27
Equipment finance	84		—			—		—
Time and demand other	—		—			—		—
Real estate construction	—		—			—		—
Construction other	—		—			—		—
Construction residential	—		—			—		—
Residential real estate	6,312		19			8,769		57
Residential first lien	3,584		19			4,963		43
Residential junior lien/home equity	2,728		—			3,806		14
Commercial real estate	22,853		(43)			16,676		49
Multifamily	23		—			273		—
Nonowner occupied	20,527		4			14,796		42
Owner occupied	2,303		(47)			1,607		7
Loans to individuals	454		1			423		5
Automobile	353		1			365		5
Consumer other	101		—			58		—
Subtotal	34,035		(33)			29,690		138
With an allowance recorded:
Commercial, financial, agricultural and other	11,445		—			—		—
Time and demand	11,445		—			—		—
Equipment finance	—		—			—		—
Time and demand other	—		—			—		—
Real estate construction	—		—			—		—
Construction other	—		—			—		—
Construction residential	—		—			—		—
Residential real estate	1,237		—			—		—
Residential first lien	—		—			—		—
Residential junior lien/home equity	1,237		—			—		—
Commercial real estate	200		—			6,510		—
Multifamily	—		—			—		—
Nonowner occupied	—		—			6,510		—
Owner occupied	200		—			—		—
Loans to individuals	—		—			—		—
Automobile	—		—			—		—
Consumer other	—		—			—		—
Subtotal	12,882		—			6,510		—
Total	$	46,917	$	(33)		$	36,200	$	138

Unfunded commitments related to nonperforming loans were $0.2 million at both June 30, 2023 and December 31, 2022. After consideration of the requirements to draw and available collateral related to these commitments, it was determined that no reserve was required for these commitments at June 30, 2023 and December 31, 2022.

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

The Company adopted ASU 2022-02 on January 1, 2023 on a prospective basis. Disclosures for years prior to adoption continue to reflect TDR's as nonperforming loans and include TDR disclosures required under the previous guidance. Upon adoption of this guidance, the Company no longer establishes a specific reserve for modifications to borrowers experiencing financial difficulty. Instead, these modifications are included in their respective loan segment and an allowance is determined by a loss given default and probability of default methodology.

Modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal forgiveness, other- than-insignificant payment delay, term extensions or any combination thereof.

The following tables present the amortized cost basis of loan modifications made to borrowers experiencing financial difficulty:

	For the Six Months Ended June 30, 2023
	Rate Reduction		Term Extension		Principal Forgiveness		Term Extension and Payment Deferral		Total		Percentage of Total Loans and Leases
	(dollars in thousands)
Residential real estate	$	24	$	161	$	—	$	244	$	429	0.02	%
Residential first lien	24		161		—		244		429		0.03
Total	$	24	$	161	$	—	$	244	$	429	—	%

	For the Three Months Ended June 30, 2023
	Rate Reduction		Term Extension		Principal Forgiveness		Term Extension and Payment Deferral		Total		Percentage of Total Loans and Leases
	(dollars in thousands)
Residential real estate	$	—	$	161	$	—	$	244	$	405	—	%
Residential first lien	—		161		—		244		405		—
Total	$	—	$	161	$	—	$	244	$	405	—	%

The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty:

	For the Six Months Ended June 30, 2023
	Rate Reduction		Term Extension (Years)	Principal Forgiveness		Payment Deferral (Years)
	(dollars in thousands)
Residential real estate	2.25	%	3.1	$	—	0.5
Residential first lien	2.25		3.1	—		0.5
Total	2.25	%	3.1	$	—	0.5

	For the Three Months Ended June 30, 2023
	Rate Reduction		Term Extension (Years)	Principal Forgiveness		Payment Deferral (Years)
	(dollars in thousands)
Residential real estate	—	%	3.1	$	—	0.5
Residential first lien	—		3.1	—		0.5
Total	—	%	3.1	$	—	0.5

A modification is considered to be in default when the loan is 90 days or more past due. For the six months ended June 30, 2023, there were no modified loans that were considered to be in default. The following table shows the payment status of loans that have been modified on or after January 1, 2023, the date we adopted ASU 2022-02:

	June 30, 2023
	Current		30 - 59 days past due		60 - 89 days past due		90 days or greater and still accruing		Total
	(dollars in thousands)
Residential real estate	$	429	$	—	$	—	$	—	$	429
Residential first lien	429		—		—		—		429
Total loans and leases	$	429	$	—	$	—	$	—	$	429

Troubled Debt Restructurings Disclosures Prior to Adoption of ASU 2022-02

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 alternative financing sources. Troubled debt restructured loans are considered to be nonperforming loans.

The following tables provide detail, including specific reserves and reasons for modification, related to loans identified as troubled debt restructurings:

	For the Six Months Ended June 30, 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	2	$	—	$	10	$	59	$	69	$	68	$	—
Residential first lien	2	—		10		59		69		68		—
Total	2	$	—	$	10	$	59	$	69	$	68	$	—

The troubled debt restructurings included in the above tables are also included in the nonperforming loan tables provided earlier in this note. Loans defined as modified due to a change in rate may 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 six months ended June 30, 2022, $10 thousand in rate modifications represent loans with modifications to the rate as well as payment as a result of re-amortization. The changes in loan balances between the pre-modification balance and the post-modification balance are due to customer payments.

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 six months ended June 30, 2022.

	2022
	Number of Contracts	Recorded Investment
	(dollars in thousands)
Loans to individuals	1	$	16
Automobile and recreational vehicles	1	16
Total	1	$	16

For the three months ended June 30, 2022, there were no loans restructured within the past twelve months that were considered to be in default.

The following tables provide detail related to the allowance for credit losses:

	For the Six Months Ended June 30, 2023
	Beginning balance		Allowance for credit loss on PCD acquired loans		Charge-offs		Recoveries		Provision (credit)a		Ending balance
	(dollars in thousands)
Commercial, financial, agricultural and other	$	22,650	$	19,417	$	(7,340)	$	254	$	6,733	$	41,714
Time and demand	20,040		19,417		(6,470)		168		4,718		37,873
Commercial credit cards	335		—		(35)		7		13		320
Equipment finance	1,086		—		(45)		—		1,033		2,074
Time and demand other	1,189		—		(790)		79		969		1,447
Real estate construction	8,822		287		—		—		(1,381)		7,728
Construction other	6,360		227		—		—		(442)		6,145
Construction residential	2,462		60		—		—		(939)		1,583
Residential real estate	21,412		527		(80)		71		1,810		23,740
Residential first lien	14,822		197		(17)		43		1,518		16,563
Residential junior lien/home equity	6,590		330		(63)		28		292		7,177
Commercial real estate	28,804		6,971		(1,517)		136		4,533		38,927
Multifamily	4,726		234		—		—		815		5,775
Nonowner occupied	16,426		2,739		—		124		2,421		21,710
Owner occupied	7,652		3,998		(1,517)		12		1,297		11,442
Loans to individuals	21,218		3		(2,289)		927		1,578		21,437
Automobile and recreational vehicles	18,819		3		(1,586)		702		1,320		19,258
Consumer credit cards	412		—		(146)		47		62		375
Consumer other	1,987		—		(557)		178		196		1,804
Total loans and leases	$	102,906	$	27,205	$	(11,226)	$	1,388	$	13,273	$	133,546

a) The provision expense (credit) shown here includes the day 1 provision on non-PCD loans acquired from Centric and excludes the provision for off-balance sheet credit exposure included in the income statement.

	For the Six Months Ended June 30, 2022
	Beginning balance		Charge-offs		Recoveries		Provision (credit)a		Ending balance
	(dollars in thousands)
Commercial, financial, agricultural and other	$	18,093	$	(984)	$	159	$	4,721	$	21,989
Time and demand	15,283		(283)		78		4,843		19,921
Commercial credit cards	247		(77)		26		191		387
Equipment finance	—		—		—		272		272
Time and demand other	2,563		(624)		55		(585)		1,409
Real estate construction	4,220		—		—		1,309		5,529
Construction other	3,278		—		—		322		3,600
Construction residential	942		—		—		987		1,929
Residential real estate	12,625		(144)		60		5,206		17,747
Residential first lien	7,459		(45)		45		4,401		11,860
Residential junior lien/home equity	5,166		(99)		15		805		5,887
Commercial real estate	33,376		(552)		19		(1,456)		31,387
Multifamily	3,561		(411)		—		405		3,555
Nonowner occupied	24,838		(141)		10		(3,754)		20,953
Owner occupied	4,977		—		9		1,893		6,879
Loans to individuals	24,208		(2,049)		829		(6,037)		16,951
Automobile and recreational vehicles	21,392		(977)		543		(6,395)		14,563
Consumer credit cards	496		(233)		38		11		312
Consumer other	2,320		(839)		248		347		2,076
Total loans and leases	$	92,522	$	(3,729)	$	1,067	$	3,743	$	93,603

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

	For the Three Months Ended June 30, 2023
	Beginning balance		Allowance for credit loss on PCD acquired loans		Charge-offs		Recoveries		Provision (credit)a		Ending balance
	(dollars in thousands)
Commercial, financial, agricultural and other	$	42,568	$	3,468	$	(6,677)	$	95	$	2,260	$	41,714
Time and demand	39,465		3,468		(6,215)		52		1,103		37,873
Commercial credit cards	331		—		(9)		5		(7)		320
Equipment finance	1,461		—		—		—		613		2,074
Time and demand other	1,311		—		(453)		38		551		1,447
Real estate construction	7,949		—		—		—		(221)		7,728
Construction other	5,891		—		—		—		254		6,145
Construction residential	2,058		—		—		—		(475)		1,583
Residential real estate	22,773		—		(1)		33		935		23,740
Residential first lien	15,824		—		(1)		17		723		16,563
Residential junior lien/home equity	6,949		—		—		16		212		7,177
Commercial real estate	39,377		1,658		(1,517)		94		(685)		38,927
Multifamily	5,541		—		—		—		234		5,775
Nonowner occupied	21,552		—		—		86		72		21,710
Owner occupied	12,284		1,658		(1,517)		8		(991)		11,442
Loans to individuals	21,218		—		(1,148)		456		911		21,437
Automobile and recreational vehicles	19,013		—		(784)		312		717		19,258
Consumer credit cards	368		—		(80)		30		57		375
Consumer other	1,837		—		(284)		114		137		1,804
Total loans and leases	$	133,885	$	5,126	$	(9,343)	$	678	$	3,200	$	133,546

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

	For the Three Months Ended June 30, 2022
	Beginning balance		Charge-offs		Recoveries		Provision (credit)a		Ending balance
	(dollars in thousands)
Commercial, financial, agricultural and other	$	20,721	$	(509)	$	79	$	1,698	$	21,989
Time and demand	18,907		(139)		25		1,128		19,921
Commercial credit cards	342		(58)		25		78		387
Equipment finance	31		—		—		241		272
Time and demand other	1,441		(312)		29		251		1,409
Real estate construction	4,930		—		—		599		5,529
Construction other	3,175		—		—		425		3,600
Construction residential	1,755		—		—		174		1,929
Residential real estate	16,728		(5)		31		993		17,747
Residential first lien	11,125		(5)		22		718		11,860
Residential junior lien/home equity	5,603		—		9		275		5,887
Commercial real estate	33,704		(552)		5		(1,770)		31,387
Multifamily	3,610		(411)		—		356		3,555
Nonowner occupied	23,267		(141)		5		(2,178)		20,953
Owner occupied	6,827		—		—		52		6,879
Loans to individuals	15,105		(1,040)		463		2,423		16,951
Automobile and recreational vehicles	12,635		(425)		288		2,065		14,563
Consumer credit cards	382		(124)		14		40		312
Consumer other	2,088		(491)		161		318		2,076
Total loans and leases	$	91,188	$	(2,106)	$	578	$	3,943	$	93,603

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

Recorded Investment and Unpaid Principal Balance for Impaired Loans with Associated Allowance

The following tables include the recorded investment and unpaid principal balance for nonperforming loans with the associated allowance amount, if applicable, as of June 30, 2023 and December 31, 2022. Also presented are the average recorded investment in nonperforming loans and the related amount of interest recognized while the loan was considered nonperforming. Average balances are calculated using month-end balances of the loans for the period reported and are included in the table below based on their period-end allowance position. The increase in nonperforming loans is primarily a result of $18.7 million in loans acquired from Centric, offset by the removal of $6.4 million in accruing troubled debt restructurings ("TDR's"). The TDR's were eliminated as a result of our adoption of ASU 2022-02, Financial Instruments Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02"). This standard was adopted on January 1, 2023 and eliminates the accounting guidance for TDR's while enhancing disclosure requirements for loan modifications for borrowers experiencing financial difficulty.

	June 30, 2023						December 31, 2022
	Recorded investment		Unpaid principal balance		Related allowance		Recorded investment		Unpaid principal balance		Related allowance
	(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other	$	1,878	$	10,270			$	3,141	$	9,555
Time and demand	1,755		10,147				3,141		9,555
Equipment finance	123		123				—		—
Time and demand other	—		—				—		—
Real estate construction	—		—				—		—
Construction other	—		—				—		—
Construction residential	—		—				—		—
Residential real estate	6,266		8,071				9,145		11,010
Residential first lien	3,548		4,618				5,754		6,848
Residential junior lien/home equity	2,718		3,453				3,391		4,162
Commercial real estate	22,409		24,509				21,505		24,119
Multifamily	68		68				—		—
Nonowner occupied	20,649		22,931				20,155		22,565
Owner occupied	1,692		1,510				1,350		1,554
Loans to individuals	468		535				528		563
Automobile and recreational vehicles	350		418				440		475
Consumer other	118		117				88		88
Subtotal	31,021		43,385				34,319		45,247
With an allowance recorded:
Commercial, financial, agricultural and other	15,152		15,826		$	12,404	1,168		1,186		$	711
Time and demand	15,152		15,826		12,404		1,168		1,186		711
Equipment finance	—		—		—		—		—		—
Time and demand other	—		—		—		—		—		—
Real estate construction	—		—		—		—		—		—
Construction other	—		—		—		—		—		—
Construction residential	—		—		—		—		—		—
Residential real estate	1,236		1,406		103		—		—		—
Residential first lien	—		—		—		—		—		—
Residential junior lien/home equity	1,236		1,406		103		—		—		—
Commercial real estate	600		620		63		—		—		—
Multifamily	—		—		—		—		—		—
Nonowner occupied	—		—		—		—		—		—
Owner occupied	600		620		63		—		—		—
Loans to individuals	—		—		—		—		—		—
Automobile and recreational vehicles	—		—		—		—		—		—
Consumer other	—		—		—		—		—		—
Subtotal	16,988		17,852		12,570		1,168		1,186		711
Total	$	48,009	$	61,237	$	12,570	$	35,487	$	46,433	$	711

	For the Six Months Ended June 30,
	2023				2022
	Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized
	(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other	$	4,444	$	(10)	$	3,883	$	50
Time and demand	4,283		(10)		3,883		50
Equipment finance	161		—		—		—
Time and demand other	—		—		—		—
Real estate construction	—		—		—		—
Construction other	—		—		—		—
Construction residential	—		—		—		—
Residential real estate	6,190		40		8,985		141
Residential first lien	3,510		40		5,080		105
Residential junior lien/home equity	2,680		—		3,905		36
Commercial real estate	22,769		(43)		16,933		63
Multifamily	11		—		344		—
Nonowner occupied	20,565		4		14,986		52
Owner occupied	2,193		(47)		1,603		11
Loans to individuals	443		1		432		8
Automobile and recreational vehicles	355		1		361		8
Consumer other	88		—		71		—
Subtotal	33,846		(12)		30,233		262
With an allowance recorded:
Commercial, financial, agricultural and other	8,056		—		—		—
Time and demand	8,056		—		—		—
Equipment finance	—		—		—		—
Time and demand other	—		—		—		—
Real estate construction	—		—		—		—
Construction other	—		—		—		—
Construction residential	—		—		—		—
Residential real estate	1,030		—		—		—
Residential first lien	—		—		—		—
Residential junior lien/home equity	1,030		—		—		—
Commercial real estate	100		—		7,024		—
Multifamily	—		—		—		—
Nonowner occupied	—		—		7,024		—
Owner occupied	100		—		—		—
Loans to individuals	—		—		—		—
Automobile and recreational vehicles	—		—		—		—
Consumer other	—		—		—		—
Subtotal	9,186		—		7,024		—
Total	$	43,032	$	(12)	$	37,257	$	262

	For the Three Months Ended June 30,
	2023				2022
	Average recorded investment		Interest income recognized			Average recorded investment		Interest Income Recognized
	(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other	$	4,416	$	(10)		$	3,822	$	27
Time and demand	4,332		(10)			3,822		27
Equipment finance	84		—			—		—
Time and demand other	—		—			—		—
Real estate construction	—		—			—		—
Construction other	—		—			—		—
Construction residential	—		—			—		—
Residential real estate	6,312		19			8,769		57
Residential first lien	3,584		19			4,963		43
Residential junior lien/home equity	2,728		—			3,806		14
Commercial real estate	22,853		(43)			16,676		49
Multifamily	23		—			273		—
Nonowner occupied	20,527		4			14,796		42
Owner occupied	2,303		(47)			1,607		7
Loans to individuals	454		1			423		5
Automobile	353		1			365		5
Consumer other	101		—			58		—
Subtotal	34,035		(33)			29,690		138
With an allowance recorded:
Commercial, financial, agricultural and other	11,445		—			—		—
Time and demand	11,445		—			—		—
Equipment finance	—		—			—		—
Time and demand other	—		—			—		—
Real estate construction	—		—			—		—
Construction other	—		—			—		—
Construction residential	—		—			—		—
Residential real estate	1,237		—			—		—
Residential first lien	—		—			—		—
Residential junior lien/home equity	1,237		—			—		—
Commercial real estate	200		—			6,510		—
Multifamily	—		—			—		—
Nonowner occupied	—		—			6,510		—
Owner occupied	200		—			—		—
Loans to individuals	—		—			—		—
Automobile	—		—			—		—
Consumer other	—		—			—		—
Subtotal	12,882		—			6,510		—
Total	$	46,917	$	(33)		$	36,200	$	138