The following table presents total loans outstanding, by portfolio segment, as of March 31, 2022 and December 31, 2021:

(1)	Included Paycheck Protection Program, or PPP, loans of $13.1 million at March 31, 2022 and $33.6 million at December 31, 2021.

Total loans included net deferred loan fees and costs of $444 thousand and $231 thousand at March 31, 2022 and December 31, 2021, respectively. Deferred loan fees on PPP loans were $333 thousand at March 31, 2022 and $881 thousand at December 31, 2021.

Management monitors the credit quality of its loan portfolio on an ongoing basis. Measurements of delinquency and past due status are based on the contractual terms of each loan. Past due loans are reviewed regularly to identify loans for nonaccrual status. Loan modifications made in accordance with the Interagency Statement on Loan Modifications and Reporting for Financial Institutions, as issued on April 7, 2020, are included as accruing current.

The following tables present a past due aging analysis of total loans outstanding, by portfolio segment, as of March 31, 2022 and December 31, 2021:


	March 31, 2022
					90 Days
	Accruing		30 - 89 Days		or More				Total
(dollars in thousands)	Current		Past Due		Past Due		Nonaccrual		Loans
Commercial
Commercial and industrial	$	465,678	$	218	$	146	$	1,407	$	467,449
Real estate construction		41,604		—		—		—		41,604
Commercial real estate		601,087		442		—		629		602,158
Total commercial		1,108,369		660		146		2,036		1,111,211
Consumer
Residential real estate first mortgage		520,043		687		—		1,759		522,489
Residential real estate junior lien		129,934		445		—		225		130,604
Other revolving and installment		53,518		171		—		49		53,738
Total consumer		703,495		1,303		—		2,033		706,831
Total loans	$	1,811,864	$	1,963	$	146	$	4,069	$	1,818,042


	December 31, 2021
					90 Days
	Accruing		30 - 89 Days		or More				Total
(dollars in thousands)	Current		Past Due		Past Due		Nonaccrual		Loans
Commercial
Commercial and industrial	$	435,135	$	168	$	121	$	1,337	$	436,761
Real estate construction		40,619		—		—		—		40,619
Commercial real estate		598,264		—		—		629		598,893
Total commercial		1,074,018		168		121		1,966		1,076,273
Consumer
Residential real estate first mortgage		508,925		1,770		—		21		510,716
Residential real estate junior lien		125,412		167		—		89		125,668
Other revolving and installment		45,242		121		—		—		45,363
Total consumer		679,579		2,058		—		110		681,747
Total loans	$	1,753,597	$	2,226	$	121	$	2,076	$	1,758,020

Interest income foregone on nonaccrual loans approximated $36 thousand and $80 thousand for the three months ended March 31, 2022 and 2021, respectively.

The Company’s consumer loan portfolio is primarily comprised of secured loans that are evaluated at origination on a centralized basis against standardized underwriting criteria. The Company generally does not risk rate consumer loans unless a default event such as bankruptcy or extended nonperformance takes place. Credit quality for the consumer loan portfolio is measured by delinquency rates, nonaccrual amounts and actual losses incurred.

The Company assigns a risk rating to all commercial loans, except pools of homogeneous loans, and periodically performs detailed internal and external reviews of risk rated loans over a certain threshold to identify credit risks and to assess the overall collectability of the portfolio. These risk ratings are also subject to examination by the Company’s regulators. During the internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which the borrowers operate and the estimated fair values of collateral securing the loans. These credit quality indicators are used to assign a risk rating to each individual loan.

The Company’s ratings are aligned to pass and criticized categories. The criticized category includes special mention, substandard, and doubtful risk ratings. The risk ratings are defined as follows:

Pass: A pass loan is a credit with no existing or known potential weaknesses deserving of management’s close attention.

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, this potential weakness may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

Substandard: Loans classified as substandard are not adequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. Well-defined weaknesses include a borrower’s lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time, or the failure to fulfill economic expectations. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

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.

Loss: Loans classified as loss are considered uncollectible and charged off immediately.

The tables below present total loans outstanding, by loan portfolio segment, and risk category as of March 31, 2022 and December 31, 2021:


	March 31, 2022
			Criticized
			Special
(dollars in thousands)	Pass		Mention		Substandard		Doubtful		Total
Commercial
Commercial and industrial	$	463,278	$	—	$	4,171	$	—	$	467,449
Real estate construction		41,604		—		—		—		41,604
Commercial real estate		592,748		—		9,410		—		602,158
Total commercial		1,097,630		—		13,581		—		1,111,211
Consumer
Residential real estate first mortgage		520,438		—		2,051		—		522,489
Residential real estate junior lien		129,830		—		774		—		130,604
Other revolving and installment		53,689		—		49		—		53,738
Total consumer		703,957		—		2,874		—		706,831
Total loans	$	1,801,587	$	—	$	16,455	$	—	$	1,818,042


	December 31, 2021
			Criticized
			Special
(dollars in thousands)	Pass		Mention		Substandard		Doubtful		Total
Commercial
Commercial and industrial	$	430,235	$	480	$	6,046	$	—	$	436,761
Real estate construction		40,619		—		—		—		40,619
Commercial real estate		585,291		—		13,602		—		598,893
Total commercial		1,056,145		480		19,648		—		1,076,273
Consumer
Residential real estate first mortgage		510,375		—		341		—		510,716
Residential real estate junior lien		124,898		—		770		—		125,668
Other revolving and installment		45,363		—		—		—		45,363
Total consumer		680,636		—		1,111		—		681,747
Total loans	$	1,736,781	$	480	$	20,759	$	—	$	1,758,020

The adequacy of the allowance for loan losses is assessed at the end of each quarter. The allowance for loan losses includes a specific component related to loans that are individually evaluated for impairment and a general component related to loans that are segregated into homogeneous pools and collectively evaluated for impairment. The factors applied to these pools are an estimate of probable incurred losses based on management’s evaluation of historical

net losses from loans with similar characteristics, which are adjusted by management to reflect current events, trends, and conditions. The adjustments include consideration of the following: changes in lending policies and procedures, economic conditions, nature and volume of the portfolio, experience of lending management, volume and severity of past due loans, quality of the loan review system, value of underlying collateral for collateral dependent loans, concentrations, and other external factors.

The following tables present, by loan portfolio segment, a summary of the changes in the allowance for loan losses for the three months ended March 31, 2022 and 2021:


	Three months ended March 31, 2022
	Beginning		Provision for		Loan		Loan		Ending
(dollars in thousands)	Balance		Loan Losses		Charge-offs		Recoveries		Balance
Commercial
Commercial and industrial	$	8,925	$	771	$	(27)	$	126	$	9,795
Real estate construction		783		27		—		—		810
Commercial real estate		12,376		(441)		—		11		11,946
Total commercial		22,084		357		(27)		137		22,551
Consumer
Residential real estate first mortgage		6,532		129		—		—		6,661
Residential real estate junior lien		1,295		92		—		13		1,400
Other revolving and installment		481		145		(18)		36		644
Total consumer		8,308		366		(18)		49		8,705
Unallocated		1,180		(723)		—		—		457
Total	$	31,572	$	—	$	(45)	$	186	$	31,713


	Three months ended March 31, 2021
	Beginning		Provision for		Loan		Loan		Ending
(dollars in thousands)	Balance		Loan Losses		Charge-offs		Recoveries		Balance
Commercial
Commercial and industrial	$	10,205	$	316	$	(204)	$	170	$	10,487
Real estate construction		658		(60)		—		—		598
Commercial real estate		14,105		277		(536)		3		13,849
Total commercial		24,968		533		(740)		173		24,934
Consumer
Residential real estate first mortgage		5,774		273		—		—		6,047
Residential real estate junior lien		1,373		(168)		—		83		1,288
Other revolving and installment		753		(83)		(44)		40		666
Total consumer		7,900		22		(44)		123		8,001
Unallocated		1,378		(555)		—		—		823
Total	$	34,246	$	—	$	(784)	$	296	$	33,758

The following tables present the recorded investment in loans and related allowance for loan losses, by loan portfolio segment, disaggregated on the basis of the Company’s impairment methodology, as of March 31, 2022 and December 31, 2021:


	March 31, 2022
	Recorded Investment						Allowance for Loan Losses
	Individually		Collectively				Individually		Collectively
(dollars in thousands)	Evaluated		Evaluated		Total		Evaluated		Evaluated		Total
Commercial
Commercial and industrial	$	1,584	$	465,865	$	467,449	$	339	$	9,456	$	9,795
Real estate construction		—		41,604		41,604		—		810		810
Commercial real estate		806		601,352		602,158		4		11,942		11,946
Total commercial		2,390		1,108,821		1,111,211		343		22,208		22,551
Consumer
Residential real estate first mortgage		1,759		520,730		522,489		—		6,661		6,661
Residential real estate junior lien		226		130,378		130,604		—		1,400		1,400
Other revolving and installment		49		53,689		53,738		18		626		644
Total consumer		2,034		704,797		706,831		18		8,687		8,705
Unallocated		—		—		—		—		—		457
Total loans	$	4,424	$	1,813,618	$	1,818,042	$	361	$	30,895	$	31,713


	December 31, 2021
	Recorded Investment						Allowance for Loan Losses
	Individually		Collectively				Individually		Collectively
(dollars in thousands)	Evaluated		Evaluated		Total		Evaluated		Evaluated		Total
Commercial
Commercial and industrial	$	1,831	$	434,930	$	436,761	$	278	$	8,647	$	8,925
Real estate construction		—		40,619		40,619		—		783		783
Commercial real estate		809		598,084		598,893		5		12,371		12,376
Total commercial		2,640		1,073,633		1,076,273		283		21,801		22,084
Consumer
Residential real estate first mortgage		21		510,695		510,716		—		6,532		6,532
Residential real estate junior lien		91		125,577		125,668		—		1,295		1,295
Other revolving and installment		—		45,363		45,363		—		481		481
Total consumer		112		681,635		681,747		—		8,308		8,308
Unallocated		—		—		—		—		—		1,180
Total loans	$	2,752	$	1,755,268	$	1,758,020	$	283	$	30,109	$	31,572

The tables below summarize key information on impaired loans. These impaired loans may have estimated losses which are included in the allowance for loan losses.


	March 31, 2022						December 31, 2021
	Recorded		Unpaid		Related		Recorded		Unpaid		Related
(dollars in thousands)	Investment		Principal		Allowance		Investment		Principal		Allowance
Impaired loans with a valuation allowance
Commercial and industrial	$	508	$	532	$	339	$	445	$	464	$	278
Commercial real estate		177		199		4		180		203		5
Residential real estate junior lien		—		—		—		—		—		—
Other revolving and installment		40		40		18		—		—		—
Total impaired loans with a valuation allowance		725		771		361		625		667		283
Impaired loans without a valuation allowance
Commercial and industrial		1,076		1,188		—		1,386		1,575		—
Commercial real estate		629		684		—		629		684		—
Residential real estate first mortgage		1,759		1,759		—		21		24		—
Residential real estate junior lien		226		256		—		91		120		—
Other revolving and installment		9		9		—		—		—		—
Total impaired loans without a valuation allowance		3,699		3,896		—		2,127		2,403		—
Total impaired loans
Commercial and industrial		1,584		1,720		339		1,831		2,039		278
Commercial real estate		806		883		4		809		887		5
Residential real estate first mortgage		1,759		1,759		—		21		24		—
Residential real estate junior lien		226		256		—		91		120		—
Other revolving and installment		49		49		18		—		—		—
Total impaired loans	$	4,424	$	4,667	$	361	$	2,752	$	3,070	$	283

The table below presents the average recorded investment in impaired loans and interest income for the three months ended March 31, 2022 and 2021:


	Three Months Ended March 31,
	2022				2021
	Average				Average
	Recorded		Interest		Recorded		Interest
(dollars in thousands)	Investment		Income		Investment		Income
Impaired loans with a valuation allowance
Commercial and industrial	$	528	$	3	$	1,816	$	13
Commercial real estate		180		2		2,793		138
Residential real estate junior lien		—		—		33		—
Other revolving and installment		41		—		38		—
Total impaired loans with a valuation allowance		749		5		4,680		151
Impaired loans without a valuation allowance
Commercial and industrial		1,126		—		1,258		22
Commercial real estate		642		—		2,158		—
Residential real estate first mortgage		1,759		—		435		—
Residential real estate junior lien		230		—		176		—
Other revolving and installment		9		—		—		—
Total impaired loans without a valuation allowance		3,766		—		4,027		22
Total impaired loans
Commercial and industrial		1,654		3		3,074		35
Commercial real estate		822		2		4,951		138
Residential real estate first mortgage		1,759		—		435		—
Residential real estate junior lien		230		—		209		—
Other revolving and installment		50		—		38		—
Total impaired loans	$	4,515	$	5	$	8,707	$	173

Loans with a carrying value of $1.3 billion as of March 31, 2022 and $1.2 billion as of December 31, 2021, were pledged to secure public deposits, and for other purposes required or permitted by law.

Under certain circumstances, the Company will provide borrowers relief through loan restructurings. A restructuring of debt constitutes a TDR if the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. TDR concessions can include a reduction of interest rates, an extension of maturity dates, forgiveness of principal or interest due, or acceptance of other assets in full or partial satisfaction of the debt.

During the first quarter of 2022, there were no loans modified as a TDR. During the first quarter of 2021, there were no loans modified as a TDR.

The Company does not have material commitments to lend additional funds to borrowers with loans whose terms have been modified in TDRs or whose loans are on nonaccrual