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Note 3 - Loans and Allowance for Credit Losses on Loans

6 Months Ended

Jun. 30, 2024

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

(3)

Loans and Allowance for Credit Losses on Loans

Composition of loans by class follows:

(in thousands)	June 30, 2024		December 31, 2023

Commercial real estate - non-owner occupied	$	1,652,614	$	1,561,689
Commercial real estate - owner occupied		943,013		907,424
Total commercial real estate		2,595,627		2,469,113

Commercial and industrial - term		868,093		867,380
Commercial and industrial - lines of credit		488,877		439,748
Total commercial and industrial		1,356,970		1,307,128

Residential real estate - owner occupied		749,870		708,893
Residential real estate - non-owner occupied		365,846		358,715
Total residential real estate		1,115,716		1,067,608

Construction and land development		586,820		531,324
Home equity lines of credit		223,304		211,390
Consumer		151,221		145,340
Leases		17,258		15,503
Credits cards		24,047		23,632
Total loans (1)	$	6,070,963	$	5,771,038

(1) Total loans are presented inclusive of premiums, discounts and net loan origination fees and costs.

Accrued interest receivable on loans, which is excluded from the amortized cost of loans, totaled $23 million and $21 million at June 30, 2024 and December 31, 2023, respectively, and was included in the condensed consolidated balance sheets.

Loans with carrying amounts of $3.27 billion and $3.15 billion were pledged to secure FHLB borrowing capacity at June 30, 2024 and December 31, 2023, respectively.

Loans to directors and their related interests, including loans to companies for which directors are principal owners and executive officers, totaled $74 million and $62 million as of June 30, 2024 and December 31, 2023, respectively.

ACL for Loans

The table below reflects activity in the ACL related to loans:

(in thousands) Three Months Ended June 30, 2024	Beginning Balance		Provision for Credit Losses on Loans			Charge-offs			Recoveries		Ending Balance

Commercial real estate - non-owner occupied	$	21,823	$	(8,808	)	$	-		$	17	$	13,032
Commercial real estate - owner occupied		11,230		(1,556	)		-			45		9,719
Total commercial real estate		33,053		(10,364	)		-			62		22,751

Commercial and industrial - term		13,916		7,478			(67	)		302		21,629
Commercial and industrial - lines of credit		6,258		(433	)		-			-		5,825
Total commercial and industrial		20,174		7,045			(67	)		302		27,454

Residential real estate - owner occupied		11,826		1,501			(7	)		5		13,325
Residential real estate - non-owner occupied		4,731		(483	)		-			-		4,248
Total residential real estate		16,557		1,018			(7	)		5		17,573

Construction and land development		7,459		2,570			-			-		10,029
Home equity lines of credit		1,666		(519	)		-			-		1,147
Consumer		1,500		1,108			(203	)		147		2,552
Leases		232		179			-			-		411
Credit cards		256		38			(70	)		14		238
Total	$	80,897	$	1,075		$	(347	)	$	530	$	82,155

(in thousands) Six Months Ended June 30, 2024	Beginning Balance		Provision for Credit Losses on Loans			Charge-offs			Recoveries		Ending Balance

Commercial real estate - non-owner occupied	$	22,133	$	(9,134	)	$	-		$	33	$	13,032
Commercial real estate - owner occupied		11,667		(1,997	)		-			49		9,719
Total commercial real estate		33,800		(11,131	)		-			82		22,751

Commercial and industrial - term		14,359		6,805			(90	)		555		21,629
Commercial and industrial - lines of credit		6,495		(874	)		-			204		5,825
Total commercial and industrial		20,854		5,931			(90	)		759		27,454

Residential real estate - owner occupied		9,316		4,010			(21	)		20		13,325
Residential real estate - non-owner occupied		4,282		(34	)		-			-		4,248
Total residential real estate		13,598		3,976			(21	)		20		17,573

Construction and land development		7,593		2,436			-			-		10,029
Home equity lines of credit		1,660		(515	)		-			2		1,147
Consumer		1,407		1,300			(413	)		258		2,552
Leases		220		191			-			-		411
Credit cards		242		62			(85	)		19		238
Total	$	79,374	$	2,250		$	(609	)	$	1,140	$	82,155

(in thousands) Three Months Ended June 30, 2023	Beginning Balance		Provision for Credit Losses on Loans			Charge-offs			Recoveries		Ending Balance

Commercial real estate - non-owner occupied	$	21,669	$	87		$	-		$	17	$	21,773
Commercial real estate - owner occupied		11,429		128			-			-		11,557
Total commercial real estate		33,098		215			-			17		33,330

Commercial and industrial - term		13,998		851			(57	)		-		14,792
Commercial and industrial - lines of credit		6,025		416			-			62		6,503
Total commercial and industrial		20,023		1,267			(57	)		62		21,295

Residential real estate - owner occupied		8,205		662			(43	)		11		8,835
Residential real estate - non-owner occupied		4,144		24			-			1		4,169
Total residential real estate		12,349		686			(43	)		12		13,004

Construction and land development		6,735		17			-			-		6,752
Home equity lines of credit		1,618		(9	)		-			-		1,609
Consumer		1,186		201			(208	)		106		1,285
Leases		199		6			-			-		205
Credit cards		465		(233	)		(12	)		10		230
Total	$	75,673	$	2,150		$	(320	)	$	207	$	77,710

(in thousands) Six Months Ended June 30, 2023	Beginning Balance		Provision for Credit Losses on Loans			Charge-offs			Recoveries		Ending Balance

Commercial real estate - non-owner occupied	$	22,641	$	(904	)	$	-		$	36	$	21,773
Commercial real estate - owner occupied		10,827		730			-			-		11,557
Total commercial real estate		33,468		(174	)		-			36		33,330

Commercial and industrial - term		12,991		1,929			(128	)		-		14,792
Commercial and industrial - lines of credit		6,389		(35	)		-			149		6,503
Total commercial and industrial		19,380		1,894			(128	)		149		21,295

Residential real estate - owner occupied		6,717		2,140			(43	)		21		8,835
Residential real estate - non-owner occupied		3,597		570			-			2		4,169
Total residential real estate		10,314		2,710			(43	)		23		13,004

Construction and land development		7,186		(434	)		-			-		6,752
Home equity lines of credit		1,613		8			(12	)		-		1,609
Consumer		1,158		289			(407	)		245		1,285
Leases		201		4			-			-		205
Credit cards		211		103			(100	)		16		230
Total	$	73,531	$	4,400		$	(690	)	$	469	$	77,710

The following tables present the amortized cost basis of non-performing loans and the amortized cost basis of loans on non-accrual status for which there was no related ACL losses:

	Non-accrual Loans				Past Due 90-Days-
(in thousands)	With No		Total		or-More and Still
June 30, 2024	Recorded ACL		Non-accrual		Accruing Interest

Commercial real estate - non-owner occupied	$	310	$	1,574	$	—
Commercial real estate - owner occupied		688		1,736		—
Total commercial real estate		998		3,310		—

Commercial and industrial - term		4,401		6,953		—
Commercial and industrial - lines of credit		—		—		49
Total commercial and industrial		4,401		6,953		49

Residential real estate - owner occupied		552		5,581		—
Residential real estate - non-owner occupied		—		546		—
Total residential real estate		552		6,127		—

Construction and land development		—		—		—
Home equity lines of credit		312		563		—
Consumer		—		372		—
Leases		—		—		—
Credit cards		—		46		137
Total	$	6,263	$	17,371	$	186

	Non-accrual Loans				Past Due 90-Days-
(in thousands)	With No		Total		or-More and Still
December 31, 2023	Recorded ACL		Non-accrual		Accruing Interest

Commercial real estate - non-owner occupied	$	1,714	$	8,649	$	—
Commercial real estate - owner occupied		—		885		—
Total commercial real estate		1,714		9,534		—

Commercial and industrial - term		688		4,456		—
Commercial and industrial - lines of credit		—		215		—
Total commercial and industrial		688		4,671		—

Residential real estate - owner occupied		230		3,667		—
Residential real estate - non-owner occupied		—		372		—
Total residential real estate		230		4,039		—

Construction and land development		—		—		—
Home equity lines of credit		343		467		—
Consumer		—		337		—
Leases		—		—		—
Credit cards		—		10		110
Total	$	2,975	$	19,058	$	110

For the three month periods ended June 30, 2024 and 2023, the amount of accrued interest income previously recorded as revenue and subsequently reversed due to the change in accrual status was immaterial.

For the three month periods ended June 30, 2024 and 2023, no interest income was recognized on loans on non-accrual status.

The following table presents the amortized cost basis and ACL allocated for collateral dependent loans, which are individually evaluated to determine expected credit losses:

(in thousands) June 30, 2024	Real Estate		Accounts Receivable / Equipment		Other		Total		ACL Allocation

Commercial real estate - non-owner occupied	$	8,199	$	-	$	-	$	8,199	$	1,066
Commercial real estate - owner occupied		3,373		-		-		3,373		810
Total commercial real estate		11,572		-		-		11,572		1,876

Commercial and industrial - term		1,049		5,692		191		6,932		1,248
Commercial and industrial - lines of credit		2,182		101		-		2,283		612
Total commercial and industrial		3,231		5,793		191		9,215		1,860

Residential real estate - owner occupied		5,474		-		-		5,474		254
Residential real estate - non-owner occupied		545		-		-		545		116
Total residential real estate		6,019		-		-		6,019		370

Construction and land development		-		-		-		-		-
Home equity lines of credit		564		-		-		564		-
Consumer		-		-		370		370		12
Leases		-		-		-		-		-
Credit cards		-		-		-		-		-
Total collateral dependent loans	$	21,386	$	5,793	$	561	$	27,740	$	4,118

(in thousands) December 31, 2023	Real Estate		Accounts Receivable / Equipment		Other		Total		ACL Allocation

Commercial real estate - non-owner occupied	$	15,419	$	-	$	-	$	15,419	$	1,604
Commercial real estate - owner occupied		2,586		-		-		2,586		812
Total commercial real estate		18,005		-		-		18,005		2,416

Commercial and industrial - term		302		4,088		-		4,390		377
Commercial and industrial - lines of credit		2,781		101		-		2,882		708
Total commercial and industrial		3,083		4,189		-		7,272		1,085

Residential real estate - owner occupied		4,205		-		-		4,205		198
Residential real estate - non-owner occupied		558		-		-		558		116
Total residential real estate		4,763		-		-		4,763		314

Construction and land development		-		-		-		-		-
Home equity lines of credit		467		-		-		467		-
Consumer		-		-		335		335		18
Leases		-		-		-		-		-
Credit cards		-		-		-		-		-
Total collateral dependent loans	$	26,318	$	4,189	$	335	$	30,842	$	3,833

The following tables present the aging of contractually past due loans by portfolio class:

(in thousands)			30-59 days		60-89 days		90 or more		Total Past		Total
June 30, 2024	Current		Past Due		Past Due		days Past Due		Due Loans		Loans

Commercial real estate - non-owner occupied	$	1,650,235	$	926	$	522	$	931	$	2,379	$	1,652,614
Commercial real estate - owner occupied		940,723		831		1,240		219		2,290		943,013
Total commercial real estate		2,590,958		1,757		1,762		1,150		4,669		2,595,627

Commercial and industrial - term		860,823		5,296		427		1,547		7,270		868,093
Commercial and industrial - lines of credit		485,981		2,847		—		49		2,896		488,877
Total commercial and industrial		1,346,804		8,143		427		1,596		10,166		1,356,970

Residential real estate - owner occupied		735,752		8,165		2,525		3,428		14,118		749,870
Residential real estate - non-owner occupied		364,860		525		41		420		986		365,846
Total residential real estate		1,100,612		8,690		2,566		3,848		15,104		1,115,716

Construction and land development		586,820		—		—		—		—		586,820
Home equity lines of credit		222,522		456		75		251		782		223,304
Consumer		150,372		482		236		131		849		151,221
Leases		17,258		—		—		—		—		17,258
Credit cards		23,768		104		39		136		279		24,047
Total	$	6,039,114	$	19,632	$	5,105	$	7,112	$	31,849	$	6,070,963

(in thousands)			30-59 days		60-89 days		90 or more		Total Past		Total
December 31, 2023	Current		Past Due		Past Due		days Past Due		Due Loans		Loans

Commercial real estate - non-owner occupied	$	1,558,756	$	768	$	318	$	1,847	$	2,933	$	1,561,689
Commercial real estate - owner occupied		906,385		758		260		21		1,039		907,424
Total commercial real estate		2,465,141		1,526		578		1,868		3,972		2,469,113

Commercial and industrial - term		866,089		244		2		1,045		1,291		867,380
Commercial and industrial - lines of credit		439,671		77		—		—		77		439,748
Total commercial and industrial		1,305,760		321		2		1,045		1,368		1,307,128

Residential real estate - owner occupied		699,475		5,290		1,612		2,516		9,418		708,893
Residential real estate - non-owner occupied		357,763		621		94		237		952		358,715
Total residential real estate		1,057,238		5,911		1,706		2,753		10,370		1,067,608

Construction and land development		531,324		—		—		—		—		531,324
Home equity lines of credit		210,823		67		33		467		567		211,390
Consumer		144,640		258		145		297		700		145,340
Leases		15,503		—		—		—		—		15,503
Credit cards		23,287		191		44		110		345		23,632
Total	$	5,753,716	$	8,274	$	2,508	$	6,540	$	17,322	$	5,771,038

Loan Risk Ratings

Consistent with regulatory guidance, Bancorp categorizes loans into credit risk rating categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information and current economic trends. Pass-rated loans include all risk-rated loans other than those classified as OAEM, substandard, and doubtful, which are defined below:

OAEM – Loans classified as OAEM have potential weaknesses requiring management's heightened attention. These potential weaknesses may result in deterioration of repayment prospects for the loan or of Bancorp's credit position at some future date.

Substandard – Loans classified as substandard are inadequately protected by the paying capacity of the obligor or of collateral pledged, if any. Loans so classified have well-defined weaknesses that jeopardize ultimate repayment of the debt. Default is a distinct possibility if the deficiencies are not corrected.

Substandard non-performing – Loans classified as substandard non-performing have all the characteristics of substandard loans and have been placed on non-accrual status. Loans are usually placed on non-accrual status when prospects for recovering both principal and accrued interest are considered doubtful or when a default of principal or interest has existed for 90 days or more.

Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. A loan is typically charged off once it is classified as doubtful.

Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal of loan constitutes a current period origination. Current period renewals of credit are re-underwritten at the point of renewal and considered current period originations for purposes of the table below. Bancorp has elected not to disclose revolving loans that have converted to term loans, as activity relating to this disclosure, which is included in the tables is currently immaterial to Bancorp’s loan portfolio and is expected to be in the future.

As of June 30, 2024, the risk rating of loans based on year of origination was as follows:

															Revolving
															loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year														amortized
June 30, 2024	2024		2023			2022		2021			2020		Prior		cost basis		Total

Commercial real estate - non-owner occupied:
Risk rating
Pass	$	169,626	$	282,351		$	392,264	$	299,381		$	209,409	$	227,255	$	22,537	$	1,602,823
OAEM		4,857		3,303			-		9,879			-		8,570		-		26,609
Substandard		53		290			3,462		1,986			3,504		12,214		98		21,607
Substandard non-performing		-		76			273		-			-		1,226		-		1,575
Doubtful		-		-			-		-			-		-		-		-
Total Commercial real estate non-owner occupied	$	174,536	$	286,020		$	395,999	$	311,246		$	212,913	$	249,265	$	22,635	$	1,652,614
Current period gross charge offs	$	-	$	-		$	-	$	-		$	-	$	-	$	-	$	-

Commercial real estate - owner occupied:
Risk rating
Pass	$	66,083	$	138,925		$	170,092	$	179,919		$	164,841	$	170,701	$	17,142	$	907,703
OAEM		2,304		2,251			-		1,663			723		470		-		7,411
Substandard		2,865		8,251			8,084		2,205			4,324		434		-		26,163
Substandard non-performing		688		-			218		764			66		-		-		1,736
Doubtful		-		-			-		-			-		-		-		-
Total Commercial real estate owner occupied	$	71,940	$	149,427		$	178,394	$	184,551		$	169,954	$	171,605	$	17,142	$	943,013
Current period gross charge offs	$	-	$	-		$	-	$	-		$	-	$	-	$	-	$	-

Commercial and industrial - term:
Risk rating
Pass	$	163,743	$	201,140		$	259,464	$	137,893		$	44,668	$	41,018	$	-	$	847,926
OAEM		4,061		2,327			744		2,107			62		93		-		9,394
Substandard		-		2,101			-		1,388			17		314		-		3,820
Substandard non-performing		5,083		496			817		168			302		87		-		6,953
Doubtful		-		-			-		-			-		-		-		-
Total Commercial and industrial - term	$	172,887	$	206,064		$	261,025	$	141,556		$	45,049	$	41,512	$	-	$	868,093
Current period gross charge offs	$	-	$	(23	)	$	-	$	(67	)	$	-	$	-	$	-	$	(90	)

Commercial and industrial - lines of credit
Risk rating
Pass	$	19,415	$	16,971		$	10,625	$	2,901		$	326	$	7,502	$	387,385	$	445,125
OAEM		7,341		-			-		-			-		9		23,247		30,597
Substandard		-		-			-		-			-		-		13,155		13,155
Substandard non-performing		-		-			-		-			-		-		-		-
Doubtful		-		-			-		-			-		-		-		-
Total Commercial and industrial - lines of credit	$	26,756	$	16,971		$	10,625	$	2,901		$	326	$	7,511	$	423,787	$	488,877
Current period gross charge offs	$	-	$	-		$	-	$	-		$	-	$	-	$	-	$	-

(continued)

																			Revolving
																			loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year																		amortized
June 30, 2024	2024			2023			2022			2021			2020			Prior			cost basis			Total

Residential real estate - owner occupied
Risk rating
Pass	$	76,240		$	162,260		$	168,556		$	167,235		$	82,530		$	87,020		$	-		$	743,841
OAEM		-			-			-			87			-			-			-			87
Substandard		-			-			14			-			-			347			-			361
Substandard non-performing		33			2,261			1,949			266			128			944			-			5,581
Doubtful		-			-			-			-			-			-			-			-
Total Residential real estate - owner occupied	$	76,273		$	164,521		$	170,519		$	167,588		$	82,658		$	88,311		$	-		$	749,870
Current period gross charge offs	$	-		$	(14	)	$	-		$	-		$	-		$	(7	)	$	-		$	(21	)

Residential real estate - non-owner occupied
Risk rating
Pass	$	38,354		$	70,314		$	79,860		$	74,467		$	44,353		$	57,310		$	-		$	364,658
OAEM		-			-			1			-			-			521			-			522
Substandard		-			-			-			-			-			120			-			120
Substandard non-performing		-			-			224			18			-			304			-			546
Doubtful		-			-			-			-			-			-			-			-
Total Residential real estate - non-owner occupied	$	38,354		$	70,314		$	80,085		$	74,485		$	44,353		$	58,255		$	-		$	365,846
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Construction and land development
Risk rating
Pass	$	100,940		$	199,287		$	189,836		$	60,385		$	10,144		$	3,918		$	15,330		$	579,840
OAEM		3,683			-			-			-			-			-			999			4,682
Substandard		2,298			-			-			-			-			-			-			2,298
Substandard non-performing		-			-			-			-			-			-			-			-
Doubtful		-			-			-			-			-			-			-			-
Total Construction and land development	$	106,921		$	199,287		$	189,836		$	60,385		$	10,144		$	3,918		$	16,329		$	586,820
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Home equity lines of credit
Risk rating
Pass	$	-		$	-		$	-		$	-		$	-		$	-		$	221,504		$	221,504
OAEM		-			-			-			-			-			-			1,201			1,201
Substandard		-			-			-			-			-			-			36			36
Substandard non-performing		-			-			-			-			-			-			563			563
Doubtful		-			-			-			-			-			-			-			-
Total Home equity lines of credit	$	-		$	-		$	-		$	-		$	-		$	-		$	223,304		$	223,304
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Consumer
Risk rating
Pass	$	17,659		$	22,903		$	15,720		$	7,461		$	1,818		$	2,246		$	83,042		$	150,849
OAEM		-			-			-			-			-			-			-			-
Substandard		-			-			-			-			-			-			-			-
Substandard non-performing		-			189			30			40			32			81			-			372
Doubtful		-			-			-			-			-			-			-			-
Total Consumer	$	17,659		$	23,092		$	15,750		$	7,501		$	1,850		$	2,327		$	83,042		$	151,221
Current period gross charge offs	$	(329	)	$	(10	)	$	(12	)	$	(21	)	$	(4	)	$	(33	)	$	(4	)	$	(413	)

(continued)

																			Revolving
																			loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year																		amortized
June 30, 2024	2024			2023			2022			2021			2020			Prior			cost basis			Total

Leases
Risk rating
Pass	$	4,322		$	6,112		$	2,251		$	1,772		$	908		$	243		$	-		$	15,608
OAEM		-			-			-			13			-			-			-			13
Substandard		45			-			709			651			232			-			-			1,637
Substandard non-performing		-			-			-			-			-			-			-			-
Doubtful		-			-			-			-			-			-			-			-
Total Leases	$	4,367		$	6,112		$	2,960		$	2,436		$	1,140		$	243		$	-		$	17,258
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Credit cards
Risk rating
Pass	$	-		$	-		$	-		$	-		$	-		$	-		$	24,001		$	24,001
OAEM		-			-			-			-			-			-			-			-
Substandard		-			-			-			-			-			-			-			-
Substandard non-performing		-			-			-			-			-			-			46			46
Doubtful		-			-			-			-			-			-			-			-
Total Credit cards	$	-		$	-		$	-		$	-		$	-		$	-		$	24,047		$	24,047
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	(85	)	$	(85	)

Total loans
Risk rating
Pass	$	656,381		$	1,100,265		$	1,288,668		$	931,414		$	558,997		$	597,213		$	770,941		$	5,903,879
OAEM		22,246			7,881			745			13,749			785			9,663			25,447			80,516
Substandard		5,261			10,642			12,269			6,230			8,077			13,429			13,289			69,197
Substandard non-performing		5,804			3,021			3,511			1,256			528			2,642			609			17,371
Doubtful		-			-			-			-			-			-			-			-
Total Loans	$	689,692		$	1,121,809		$	1,305,193		$	952,649		$	568,387		$	622,947		$	810,286		$	6,070,963
Current period gross charge offs	$	(329	)	$	(47	)	$	(12	)	$	(88	)	$	(4	)	$	(40	)	$	(89	)	$	(609	)

As of December 31, 2023, the risk rating of loans based on year of origination was as follows:

																			Revolving
																			loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year																		amortized
December 31, 2023	2023			2022			2021			2020			2019			Prior			cost basis			Total

Commercial real estate - non-owner occupied:
Risk rating
Pass	$	302,787		$	370,728		$	346,600		$	220,144		$	122,732		$	136,624		$	26,187		$	1,525,802
OAEM		76			-			2,902			-			1,947			3,727			-			8,652
Substandard		290			1,093			997			3,587			12,278			243			98			18,586
Substandard non-performing		5,806			286			-			-			1,472			1,085			-			8,649
Doubtful		-			-			-			-			-			-			-			-
Total Commercial real estate non-owner occupied	$	308,959		$	372,107		$	350,499		$	223,731		$	138,429		$	141,679		$	26,285		$	1,561,689
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Commercial real estate - owner occupied:
Risk rating
Pass	$	148,498		$	164,087		$	191,350		$	179,450		$	90,575		$	100,988		$	13,941		$	888,889
OAEM		4,175			221			592			757			395			691			-			6,831
Substandard		1,675			4,258			-			4,370			458			58			-			10,819
Substandard non-performing		-			21			793			71			-			-			-			885
Doubtful		-			-			-			-			-			-			-			-
Total Commercial real estate owner occupied	$	154,348		$	168,587		$	192,735		$	184,648		$	91,428		$	101,737		$	13,941		$	907,424
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Commercial and industrial - term:
Risk rating
Pass	$	279,002		$	298,204		$	172,288		$	56,949		$	24,939		$	26,790		$	-		$	858,172
OAEM		585			819			2,520			87			139			-			-			4,150
Substandard		218			80			31			-			-			273			-			602
Substandard non-performing		3,395			592			29			338			101			1			-			4,456
Doubtful		-			-			-			-			-			-			-			-
Total Commercial and industrial - term	$	283,200		$	299,695		$	174,868		$	57,374		$	25,179		$	27,064		$	-		$	867,380
Current period gross charge offs	$	(1,315	)	$	(734	)	$	(37	)	$	(93	)	$	(37	)	$	(82	)	$	-		$	(2,298	)

Commercial and industrial - lines of credit
Risk rating
Pass	$	30,553		$	22,409		$	3,232		$	348		$	8,931		$	1,783		$	356,237		$	423,493
OAEM		-			-			-			723			20			-			8,585			9,328
Substandard		-			-			-			-			-			-			6,712			6,712
Substandard non-performing		157			-			-			-			-			-			58			215
Doubtful		-			-			-			-			-			-			-			-
Total Commercial and industrial - lines of credit	$	30,710		$	22,409		$	3,232		$	1,071		$	8,951		$	1,783		$	371,592		$	439,748
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	(3,633	)	$	(3,633	)

(continued)

																			Revolving
																			loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year																		amortized
December 31, 2023	2023			2022			2021			2020			2019			Prior			cost basis			Total

Residential real estate - owner occupied
Risk rating
Pass	$	170,446		$	178,088		$	175,561		$	86,105		$	24,354		$	70,213		$	-		$	704,767
OAEM		-			-			89			-			-			-			-			89
Substandard		-			15			-			-			-			355			-			370
Substandard non-performing		1,138			1,122			297			192			162			756			-			3,667
Doubtful		-			-			-			-			-			-			-			-
Total Residential real estate - owner occupied	$	171,584		$	179,225		$	175,947		$	86,297		$	24,516		$	71,324		$	-		$	708,893
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	(43	)	$	-		$	(43	)

Residential real estate - non-owner occupied
Risk rating
Pass	$	83,913		$	84,278		$	77,868		$	49,555		$	31,325		$	30,546		$	-		$	357,485
OAEM		-			7			-			-			262			277			-			546
Substandard		-			-			-			-			-			312			-			312
Substandard non-performing		-			233			19			-			45			75			-			372
Doubtful		-			-			-			-			-			-			-			-
Total Residential real estate - non-owner occupied	$	83,913		$	84,518		$	77,887		$	49,555		$	31,632		$	31,210		$	-		$	358,715
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Construction and land development
Risk rating
Pass	$	157,832		$	239,807		$	69,131		$	34,591		$	478		$	3,711		$	15,623		$	521,173
OAEM		-			-			3,682			-			-			-			999			4,681
Substandard		5,470			-			-			-			-			-			-			5,470
Substandard non-performing		-			-			-			-			-			-			-			-
Doubtful		-			-			-			-			-			-			-			-
Total Construction and land development	$	163,302		$	239,807		$	72,813		$	34,591		$	478		$	3,711		$	16,622		$	531,324
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Home equity lines of credit
Risk rating
Pass	$	-		$	-		$	-		$	-		$	-		$	-		$	210,886		$	210,886
OAEM		-			-			-			-			-			-			-			-
Substandard		-			-			-			-			-			-			37			37
Substandard non-performing		-			-			-			-			-			-			467			467
Doubtful		-			-			-			-			-			-			-			-
Total Home equity lines of credit	$	-		$	-		$	-		$	-		$	-		$	-		$	211,390		$	211,390
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	(12	)	$	(12	)

Consumer
Risk rating
Pass	$	30,823		$	18,399		$	10,148		$	2,832		$	1,931		$	1,765		$	79,105		$	145,003
OAEM		-			-			-			-			-			-			-			-
Substandard		-			-			-			-			-			-			-			-
Substandard non-performing		41			145			91			27			3			14			16			337
Doubtful		-			-			-			-			-			-			-			-
Total Consumer	$	30,864		$	18,544		$	10,239		$	2,859		$	1,934		$	1,779		$	79,121		$	145,340
Current period gross charge offs	$	(683	)	$	(22	)	$	(29	)	$	(43	)	$	(41	)	$	(27	)	$	(20	)	$	(865	)

(continued)

																			Revolving
																			loans
(in thousands)	Term Loans Amortized Cost Basis by Origination Year																		amortized
December 31, 2023	2023			2022			2021			2020			2019			Prior			cost basis			Total

Leases
Risk rating
Pass	$	6,801		$	3,442		$	3,117		$	1,723		$	155		$	265		$	-		$	15,503
OAEM		-			-			-			-			-			-			-			-
Substandard		-			-			-			-			-			-			-			-
Substandard non-performing		-			-			-			-			-			-			-			-
Doubtful		-			-			-			-			-			-			-			-
Total Leases	$	6,801		$	3,442		$	3,117		$	1,723		$	155		$	265		$	-		$	15,503
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Credit cards
Risk rating
Pass	$	-		$	-		$	-		$	-		$	-		$	-		$	23,622		$	23,622
OAEM		-			-			-			-			-			-			-			-
Substandard		-			-			-			-			-			-			-			-
Substandard non-performing		-			-			-			-			-			-			10			10
Doubtful		-			-			-			-			-			-			-			-
Total Credit cards	$	-		$	-		$	-		$	-		$	-		$	-		$	23,632		$	23,632
Current period gross charge offs	$	-		$	-		$	-		$	-		$	-		$	-		$	(661	)	$	(661	)

Total loans
Risk rating
Pass	$	1,207,296		$	1,379,117		$	1,047,901		$	630,129		$	305,493		$	379,258		$	725,601		$	5,674,795
OAEM		4,836			1,047			9,785			1,567			2,763			4,695			9,584			34,277
Substandard		7,653			5,446			1,028			7,957			12,736			1,241			6,847			42,908
Substandard non-performing		10,537			2,399			1,229			628			1,783			1,931			551			19,058
Doubtful		-			-			-			-			-			-			-			-
Total Loans	$	1,230,322		$	1,388,009		$	1,059,943		$	640,281		$	322,775		$	387,125		$	742,583		$	5,771,038
Current period gross charge offs	$	(1,998	)	$	(756	)	$	(66	)	$	(136	)	$	(78	)	$	(152	)	$	(4,326	)	$	(7,512	)

For certain loan classes, such as credit cards, credit quality is evaluated based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment in credit cards based on payment activity:

	June 30,		December 31,
(in thousands)	2024		2023

Credit cards
Performing	$	23,861	$	23,512
Non-performing		186		120
Total credit cards	$	24,047	$	23,632

Bancorp had $894,000 and $668,000, respectively, in residential real estate loans for which formal foreclosure proceedings were in process at June 30, 2024 and December 31, 2023.

Modifications to Borrowers Experiencing Financial Difficulty

During the three and six month periods ended June 30, 2024 and 2023 there were no modifications made to loans for borrowers experiencing financial difficulty and there were no payment defaults of existing modified loans within 12 months following modification. Default is determined at 90 days or more past due, charge off, or foreclosure.