Note 4 - Loans/Leases Receivable

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Loans/Leases Receivable

Note 4. Loans/Leases Receivable

The composition of the loan/lease portfolio as of December 31, 2023 and 2022 is presented as follows:

	December 31, 2023		December 31, 2022
	(dollars in thousands)
C&I:
C&I - revolving	$	325,243	$	296,869
C&I - other *		1,481,778		1,451,693
		1,807,021		1,748,562
CRE - owner occupied		607,365		629,367
CRE - non-owner occupied		1,008,892		963,239
Construction and land development		1,420,525		1,192,061
Multi-family		996,143		963,803
Direct financing leases**		31,164		31,889
1-4 family real estate***		544,971		499,529
Consumer		127,335		110,421
		6,543,416		6,138,871
Allowance for credit losses		(87,200)		(87,706)
	$	6,456,216	$	6,051,165
** Direct financing leases:
Net minimum lease payments to be received	$	34,966	$	34,754
Estimated unguaranteed residual values of leased assets		165		165
Unearned lease/residual income		(3,967)		(3,030)
		31,164		31,889
Plus deferred lease origination costs, net of fees		75		226
		31,239		32,115
Less allowance for credit losses		(992)		(970)
	$	30,247	$	31,145

*     Includes equipment financing agreements outstanding at m2, totaling $319.5 million and $278.0 million as of  December 31, 2023 and 2022, respectively.

** Management performs an evaluation of the estimated unguaranteed residual values of leased assets on an annual basis, at a minimum. The evaluation consists of discussions with reputable and current vendors and management’s expertise and understanding of the current states of particular industries to determine informal valuations of the equipment. As necessary and where available, management will utilize valuations by independent appraisers. The majority of leases with residual values contain a lease options rider which requires the lessee to pay the residual value directly, finance the payment of the residual value, or extend the lease term to pay the residual value. In these cases, the residual value is protected and the risk of loss is minimal.

At December 31, 2023 and December 31, 2022, the Company had two leases remaining with residual values totaling $165 thousand that were not protected with a lease end options rider. Management has performed specific evaluations of these unguaranteed residual values and determined that the valuations are appropriate. There were no losses related to unguaranteed residual values during the years ended December 31, 2023, 2022, and 2021.

*** Includes residential real estate loans held for sale totaling $2.6 million and $1.5 million as of December 31,    2023 and 2022, respectively.

Note 4. Loans/Leases Receivable (continued)

Accrued interest on loans, which is excluded from the amortized cost of loans, totaled $31.8 million and $24.3 million at December 31, 2023 and December 31, 2022, respectively, and was included in other assets on the consolidated balance sheets.

Changes in accretable discounts on acquired loans for the years ended December 31, 2023, 2022 and 2021, respectively, are presented as follows:

	Year ended
	December 31, 2023		December 31, 2022		December 31, 2021
		Performing	Performing		Performing
	Loans		Loans		Loans
	(dollars in thousands)
Balance at the beginning of the period	$	(6,088)	$	(1,533)	$	(3,139)
Discount added at acquisition		—		(13,381)		—
Accretion recognized		2,197		8,826		1,606
Balance at the end of the period	$	(3,891)	$	(6,088)	$	(1,533)

The aging of the loan/lease portfolio by classes of loans/leases as of December 31, 2023 and 2022 is presented as follows:

	2023
										Accruing Past
				30-59 Days			60-89 Days			Due 90 Days or			Nonaccrual
Classes of Loans/Leases	Current			Past Due			Past Due			More			Loans/Leases			Total
	(dollars in thousands)
C&I:
C&I - revolving	$	325,243		$	—		$	—		$	—		$	—	$		325,243
C&I - other		1,459,818			4,848			5,603			1			11,508			1,481,778
CRE - owner occupied		604,602			—			83			—			2,680			607,365
CRE - non-owner occupied		1,003,267			631			—			—			4,994			1,008,892
Construction and land development		1,418,016			—			—			—			2,509			1,420,525
Multi-family		987,971			—			—			—			8,172			996,143
Direct financing leases		30,501			186			188			—			289			31,164
1-4 family real estate		538,229			3,883			534			85			2,240			544,971
Consumer		126,868			103			3			—			361			127,335
	$	6,494,515		$	9,651		$	6,411		$	86		$	32,753		$	6,543,416
As a percentage of total loan/lease portfolio		99.25	%		0.15	%		0.10	%		0.00	%		0.50	%		100.00	%

	2022
										Accruing Past
				30-59 Days			60-89 Days			Due 90 Days or			Nonaccrual
Classes of Loans/Leases	Current			Past Due			Past Due			More			Loans/Leases			Total
	(dollars in thousands)
C&I
C&I - revolving	$	296,869		$	—		$	—		$	—		$	—		$	296,869
C&I - other		1,442,629			4,800			1,124			5			3,135			1,451,693
CRE - owner occupied		625,611			1,166			—			—			2,590			629,367
CRE - non-owner occupied		962,444			421			—			—			374			963,239
Construction and land development		1,191,929			—			—			—			132			1,192,061
Multi-family		963,803			—			—			—			—			963,803
Direct financing leases		31,557			141			56			—			135			31,889
1-4 family real estate		495,936			1,030			517			—			2,046			499,529
Consumer		110,041			27			—			—			353			110,421
	$	6,120,819		$	7,585		$	1,697		$	5		$	8,765		$	6,138,871
As a percentage of total loan/lease portfolio		99.71	%		0.12	%		0.03	%		0.00	%		0.14	%		100.00	%

Note 4. Loans/Leases Receivable (continued)

NPLs by classes of loans/leases as of December 31, 2023 and 2022 is presented as follows:

	2023
	Accruing Past		Nonaccrual		Nonaccrual
	Due 90 Days or		Loans/Leases		Loans/Leases				Percentage of
Classes of Loans/Leases	More		with an ACL		without an ACL		Total NPLs		Total NPLs
	(dollars in thousands)
C&I:
C&I - revolving	$	—	$	—	$	—	$	—	-	%
C&I - other		1		8,865		2,643		11,509	35
CRE - owner occupied		—		530		2,150		2,680	8
CRE - non-owner occupied		—		1,213		3,781		4,994	15
Construction and land development		—		2,509		—		2,509	8
Multi-family		—		—		8,172		8,172	25
Direct financing leases		—		206		83		289	1
1-4 family real estate		85		1,866		374		2,325	7
Consumer		—		361		—		361	1
	$	86	$	15,550	$	17,203	$	32,839	100	%

	2022
	Accruing Past		Nonaccrual		Nonaccrual
	Due 90 Days or		Loans/Leases		Loans/Leases				Percentage of
Classes of Loans/Leases	More		with an ACL		without an ACL		Total NPLs		Total NPLs
		(dollars in thousands)
C&I:
C&I - revolving	$	—	$	—	$	—	$	—	-	%
C&I - other		5		2,775		360		3,140	35.80
CRE - owner occupied		—		1,738		852		2,590	29.53
CRE - non-owner occupied		—		68		306		374	4.26
Construction and land development		—		132		—		132	1.51
Multi-family		—		—		—		—	-
Direct financing leases		—		80		55		135	1.54
1-4 family real estate		—		1,641		405		2,046	23.33
Consumer		—		353		—		353	4.03
	$	5	$	6,787	$	1,978	$	8,770	100.00	%

The Company did not recognize any interest income on nonaccrual loans during the years ended December 31, 2023 and 2022.

Note 4. Loans/Leases Receivable (continued)

Changes in the ACL loans/leases by portfolio segment for the years ended December 31, 2023, 2022, and 2021 are presented as follows:

	Year Ended December 31, 2023
					CRE		CRE		Construction				1-4
	C&I -		C&I -		Owner		Non-Owner		and Land		Multi-		Family
	Revolving		Other*		Occupied		Occupied		Development		Family		Real Estate		Consumer		Total
	(dollars in thousands)
Balance, beginning	$	4,457	$	27,753	$	9,965	$	11,749	$	14,262	$	13,186	$	4,963	$	1,371	$	87,706
Change in ACL for writedown of LHFS to fair value		—		(5)		—		—		(147)		(3,393)		—		—		(3,545)
Provision		(233)		7,849		(1,523)		(199)		2,789		2,670		(51)		248		11,550
Charge-offs		—		(8,952)		(222)		—		(50)		—		—		(168)		(9,392)
Recoveries		—		815		3		31		2		—		5		25		881
Balance, ending	$	4,224	$	27,460	$	8,223	$	11,581	$	16,856	$	12,463	$	4,917	$	1,476	$	87,200

*Included within the C&I-other column are ACL on leases with a beginning balance of $970 thousand, provision of $185 thousand, charge-offs of $252 thousand and recoveries of $89 thousand. ACL on leases was $992 thousand as of December 31, 2023.

	Year Ended December 31, 2022
					CRE		CRE		Construction				1-4
	C&I -		C&I -		Owner		Non-Owner		and Land		Multi-		Family
	Revolving		Other*		Occupied		Occupied		Development		Family		Real Estate		Consumer		Total
	(dollars in thousands)
Balance, beginning	$	3,907	$	25,982	$	8,501	$	8,549	$	16,972	$	9,339	$	4,541	$	930	$	78,721
Initial ACL recorded for PCD loans		600		7		2,481		1,076		1,100		481		137		20		5,902
Provision**		(50)		7,364		(1,023)		2,220		(2,981)		3,323		306		477		9,636
Charge-offs		—		(6,417)		—		(193)		(829)		—		(21)		(65)		(7,525)
Recoveries		—		817		6		97		—		43		—		9		972
Balance, ending	$	4,457	$	27,753	$	9,965	$	11,749	$	14,262	$	13,186	$	4,963	$	1,371	$	87,706

*Included within the C&I-other column are ACL on leases with a beginning balance of $1.5 million, provision of $269 thousand, charge-offs of $1.1 million and recoveries of $273 thousand. ACL on leases was $970 thousand as of December 31, 2022.

** Provision of the year ended December 31, 2022, included $11.0 million related to the Guaranty Bank acquisition.

	Year Ended December 31, 2021
									CRE		CRE		Construction				Direct		Residential		1-4
			C&I -		C&I -				Owner		Non-Owner		and Land		Multi-			Financing	Real			Family
	C & I		Revolving		Other*		CRE		Occupied		Development		Development		Family		Leases		Estate		Real Estate		Consumer		Total
	(dollars in thousands)
Balance, beginning	$	35,421	$	—	$	—	$	42,161	$	—	$	—	$	—	$	—	$	1,764	$	3,732	$	—	$	1,298	$	84,376
Adoption of ASU 2016-13		(35,421)		2,982		29,130		(42,161)		8,696		11,428		11,999		5,836		(1,764)		(3,732)		5,042		(137)		(8,102)
Provision		—		925		(1,451)		—		(198)		(1,088)		4,973		3,653		—		—		(603)		(509)		5,702
Charge-offs		—		—		(2,287)		—		—		(1,876)		—		(150)		—		—		(179)		(46)		(4,538)
Recoveries		—		—		590		—		3		85		—		—		—		—		281		324		1,283
Balance, ending	$	—	$	3,907	$	25,982	$	—	$	8,501	$	8,549	$	16,972	$	9,339	$	—	$	—	$	4,541	$	930	$	78,721

*Included within the C&I-other column are ACL on leases with a beginning balance of $1.8 million, adoption impact of $685 thousand, negative provision of $703 thousand, charge-offs of $458 thousand and recoveries of $258 thousand. ACL on leases was $1.5 million as of December 31, 2021.

Note 4. Loans/Leases Receivable (continued)

The composition of the ACL loans/leases by portfolio segment based on evaluation method are as follows:

	As of December 31, 2023
	Amortized Cost of Loans Receivable						Allowance for Credit Losses
	Individually		Collectively				Individually		Collectively
	Evaluated for		Evaluated for				Evaluated for		Evaluated for
	Credit Losses		Credit Losses		Total		Credit Losses		Credit Losses		Total
	(dollars in thousands)
C&I :
C&I - revolving	$	4,680	$	320,563	$	325,243	$	632	$	3,592	$	4,224
C&I - other*		20,133		1,492,809		1,512,942		3,642		23,818		27,460
		24,813		1,813,372		1,838,185		4,274		27,410		31,684
CRE - owner occupied		22,709		584,656		607,365		2,426		5,797		8,223
CRE - non-owner occupied		21,886		987,006		1,008,892		661		10,920		11,581
Construction and land development		2,726		1,417,799		1,420,525		809		16,047		16,856
Multi-family		8,206		987,937		996,143		3		12,460		12,463
1-4 family real estate		3,128		541,843		544,971		289		4,628		4,917
Consumer		508		126,827		127,335		56		1,420		1,476
	$	83,976	$	6,459,440	$	6,543,416	$	8,518	$	78,682	$	87,200

*Included within the C&I – other category are leases individually evaluated of $289 thousand with a related allowance for credit losses of $68 thousand and leases collectively evaluated of $30.9 million with a related allowance for credit losses of $924 thousand.

	As of December 31, 2022
	Amortized Cost of Loans Receivable						Allowance for Credit Losses
	Individually		Collectively				Individually		Collectively
	Evaluated for		Evaluated for				Evaluated for		Evaluated for
	Credit Losses		Credit Losses		Total		Credit Losses		Credit Losses		Total
	(dollars in thousands)
C&I :
C&I - revolving	$	3,386	$	293,483	$	296,869	$	961	$	3,496	$	4,457
C&I - other*		9,358		1,474,224		1,483,582		1,445		26,308		27,753
		12,744		1,767,707		1,780,451		2,406		29,804		32,210
CRE - owner occupied		24,880		604,487		629,367		2,853		7,112		9,965
CRE - non-owner occupied		21,588		941,651		963,239		869		10,880		11,749
Construction and land development		10,394		1,181,667		1,192,061		13		14,249		14,262
Multi-family		1,302		962,501		963,803		395		12,791		13,186
1-4 family real estate		3,177		496,352		499,529		317		4,646		4,963
Consumer		741		109,680		110,421		75		1,296		1,371
	$	74,826	$	6,064,045	$	6,138,871	$	6,928	$	80,778	$	87,706

*Included within the C&I – other category are leases individually evaluated of $135 thousand with a related allowance for credit losses of $24 thousand and leases collectively evaluated of $31.8 million with a related allowance for credit losses of $946 thousand.

Note 4. Loans/Leases Receivable (continued)

The following table presents the amortized cost basis of collateral dependent loans, by the primary collateral type, which are individually evaluated to determine expected credit losses:

	As of December 31, 2023
					Non
	Commercial		Owner-occupied		Owner-Occupied		Owner Occupied
	Assets		CRE		Real Estate		Real Estate		Securities		Equipment		Other		Total
	(dollars in thousands)
C & I:
C&I - revolving	$	4,680	$	—	$	—	$	—	$	—	$	—	$	—	$	4,680
C&I - other*		871		—		—		—		5,191		13,249		822		20,133
		5,551		—		—		—		5,191		13,249		822		24,813
CRE - owner occupied		—		22,644		—		65		—		—		—		22,709
CRE - non-owner occupied		—		—		21,886		—		—		—		—		21,886
Construction and land development		—		150		2,576		—		—		—		—		2,726
Multi-family		—		—		8,206		—		—		—		—		8,206
1-4 family real estate		—		—		189		2,939		—		—		—		3,128
Consumer		—		—		119		365		—		—		24		508
	$	5,551	$	22,794	$	32,976	$	3,369	$	5,191	$	13,249	$	846	$	83,976

*Included within the C&I – other category are leases individually evaluated of $289 thousand with primary collateral of equipment.

	As of December 31, 2022
					Non
	Commercial		Owner-occupied		Owner-Occupied		Owner Occupied
	Assets		CRE		Real Estate		Real Estate		Securities		Equipment		Other		Total
	(dollars in thousands)
C & I:
C&I - revolving	$	3,281	$	—	$	—	$	—	$	—	$	105	$	—	$	3,386
C&I - other*		1,589		210		—		—		108		7,289		162		9,358
		4,870		210		—		—		108		7,394		162		12,744
CRE - owner occupied		—		24,814		—		66		—		—		—		24,880
CRE - non-owner occupied		—		—		21,588		—		—		—		—		21,588
Construction and land development		—		—		10,394		—		—		—		—		10,394
Multi-family		—		—		1,302		—		—		—		—		1,302
1-4 family real estate		—		—		33		3,144		—		—		—		3,177
Consumer		—		—		120		608		—		—		13		741
	$	4,870	$	25,024	$	33,437	$	3,818	$	108	$	7,394	$	175	$	74,826

*Included within the C&I – other category are leases individually evaluated of $135 thousand with primary collateral of equipment.

For certain C&I loans, all CRE loans, certain construction and land development loans, all multifamily loans, certain 1-4 family real estate loans and certain consumer loans, the Company’s credit quality indicator consists of internally assigned risk ratings.  Each such loan is assigned a risk rating upon origination.  The risk rating is reviewed every 15 months, at a minimum, and on an as-needed basis depending on the specific circumstances of the loan.

For certain C&I loans (including equipment financing agreements and direct financing leases), certain construction and land development loans, certain 1-4 family real estate loans, and certain consumer loans, the Company’s credit quality indicator is performance determined by delinquency status.  Delinquency status is updated daily by the Company’s loan system.

Note 4. Loans/Leases Receivable (continued)

The following tables show the credit quality indicator of loans by class of receivable and year of origination as of December 31, 2023:

	2023
	Term Loans
	Amortized Cost Basis by Origination Year
													Revolving
													Loans
Internally Assigned													Amortized
Risk Rating	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
	(dollars in thousands)
C&I - revolving
Pass (Ratings 1 through 5)	$	—	$	—	$	—	$	—	$	—	$	—	$	294,449	$	294,449
Special Mention (Rating 6)		—		—		—		—		—		—		26,289		26,289
Substandard (Rating 7)		—		—		—		—		—		—		4,505		4,505
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total C&I - revolving	$	—	$	—	$	—	$	—	$	—	$	—	$	325,243	$	325,243
C&I - other
Pass (Ratings 1 through 5)	$	430,764	$	301,225	$	128,057	$	68,882	$	62,149	$	132,171	$	—	$	1,123,248
Special Mention (Rating 6)		11,617		8,777		5,572		3,088		1,024		386		—		30,464
Substandard (Rating 7)		14		81		625		443		2,108		5,320		—		8,591
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total C&I - other	$	442,395	$	310,083	$	134,254	$	72,413	$	65,281	$	137,877	$	—	$	1,162,303
CRE - owner occupied
Pass (Ratings 1 through 5)	$	90,708	$	124,388	$	139,598	$	109,483	$	28,702	$	58,214	$	12,959	$	564,052
Special Mention (Rating 6)		5,091		711		8,689		5,567		466		1,828		—		22,352
Substandard (Rating 7)		1,955		564		24		15,978		1,312		1,128		—		20,961
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total CRE - owner occupied	$	97,754	$	125,663	$	148,311	$	131,028	$	30,480	$	61,170	$	12,959	$	607,365
CRE - non-owner occupied
Pass (Ratings 1 through 5)	$	200,214	$	276,055	$	195,013	$	119,428	$	72,136	$	78,346	$	7,406	$	948,598
Special Mention (Rating 6)		16,842		58		223		12,057		2,359		6,719		150		38,408
Substandard (Rating 7)		3,805		1,200		—		1,989		14,892		—		—		21,886
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total CRE - non-owner occupied	$	220,861	$	277,313	$	195,236	$	133,474	$	89,387	$	85,065	$	7,556	$	1,008,892
Construction and land development
Pass (Ratings 1 through 5)	$	456,227	$	484,821	$	271,620	$	150,836	$	1,910	$	4,138	$	30,304	$	1,399,856
Special Mention (Rating 6)		5,324		—		—		—		—		—		—		5,324
Substandard (Rating 7)		—		1,517		1,209		—		—		—		—		2,726
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total Construction and land development	$	461,551	$	486,338	$	272,829	$	150,836	$	1,910	$	4,138	$	30,304	$	1,407,906
Multi-family
Pass (Ratings 1 through 5)	$	180,971	$	195,939	$	170,893	$	239,410	$	102,070	$	96,897	$	162	$	986,342
Special Mention (Rating 6)		1,595		—		—		—		—		—		—		1,595
Substandard (Rating 7)		—		—		8,206		—		—		—		—		8,206
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total Multi-family	$	182,566	$	195,939	$	179,099	$	239,410	$	102,070	$	96,897	$	162	$	996,143
1-4 family real estate
Pass (Ratings 1 through 5)	$	59,474	$	46,351	$	51,838	$	24,780	$	10,809	$	5,595	$	3,249	$	202,096
Special Mention (Rating 6)		28		—		—		—		—		—		—		28
Substandard (Rating 7)		32		—		—		157		1		—		—		190
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total 1-4 family real estate	$	59,534	$	46,351	$	51,838	$	24,937	$	10,810	$	5,595	$	3,249	$	202,314
Consumer
Pass (Ratings 1 through 5)	$	132	$	404	$	331	$	435	$	—	$	599	$	8,139	$	10,040
Special Mention (Rating 6)		—		—		—		—		—		—		—		—
Substandard (Rating 7)		42		119		—		—		—		87		—		248
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total Consumer	$	174	$	523	$	331	$	435	$	—	$	686	$	8,139	$	10,288
Total	$	1,464,835	$	1,442,210	$	981,898	$	752,533	$	299,938	$	391,428	$	387,612	$	5,720,454

Note 4. Loans/Leases Receivable (continued)

	2023
	Term Loans
	Amortized Cost Basis by Origination Year												Revolving
													Loans
													Amortized
Delinquency Status *	2023		2022		2021		2020		2019		Prior		Cost Basis		Total
	(dollars in thousands)
C&I - other
Performing	$	149,216	$	103,804	$	40,003	$	12,590	$	2,539	$	132	$	—	$	308,284
Nonperforming		1,533		6,138		3,049		373		92		6		—		11,191
Total C&I - other	$	150,749	$	109,942	$	43,052	$	12,963	$	2,631	$	138	$	—	$	319,475
Construction and land development
Performing	$	11,548	$	554	$	261	$	255	$	1	$	—	$	—	$	12,619
Nonperforming		—		—		—		—		—		—		—		—
Total Construction and land development	$	11,548	$	554	$	261	$	255	$	1	$	—	$	—	$	12,619
Direct financing leases
Performing	$	12,217	$	11,170	$	3,005	$	2,631	$	1,561	$	291	$	—	$	30,875
Nonperforming		—		50		43		176		20		—		—		289
Total Direct financing leases	$	12,217	$	11,220	$	3,048	$	2,807	$	1,581	$	291	$	—	$	31,164
1-4 family real estate
Performing	$	74,364	$	57,110	$	79,140	$	64,943	$	15,303	$	49,394	$	79	$	340,333
Nonperforming		197		215		619		400		320		573		—		2,324
Total 1-4 family real estate	$	74,561	$	57,325	$	79,759	$	65,343	$	15,623	$	49,967	$	79	$	342,657
Consumer
Performing	$	16,575	$	9,002	$	2,243	$	2,589	$	622	$	1,243	$	84,531	$	116,805
Nonperforming		132		—		12		12		—		46		40		242
Total Consumer	$	16,707	$	9,002	$	2,255	$	2,601	$	622	$	1,289	$	84,571	$	117,047
Total	$	265,782	$	188,043	$	128,375	$	83,969	$	20,458	$	51,685	$	84,650	$	822,962

*Performing = loans/leases accruing and less than 90 days past due.  Nonperforming = loans/leases on nonaccrual and accruing loans/leases that are greater than or equal to 90 days past due.

The following table shows the gross charge-offs of loans and leases by class of receivable and year of origination for the year ended December 31, 2023:

	Year Ended December 31, 2023
	Gross Charge-off by Origination Year
Classes of Loans/Leases	2023		2022		2021		2020		2019		Prior		Total
	(dollars in thousands)
C&I:
C&I - revolving	$	—	$	—	$	—	$	—	$	—	$	—	$	—
C&I - other		142		5,465		1,753		1,083		255		2		8,700
CRE - owner occupied		—		—		222		—		—		—		222
CRE - non-owner occupied		—		—		—		—		—		—		—
Construction and land development		—		50		—		—		—		—		50
Multi-family		—		—		—		—		—		—		—
Direct financing leases		—		78		103		41		29		1		252
1-4 family real estate		—		—		—		—		—		—		—
Consumer		28		108		24		1		5		2		168
	$	170	$	5,701	$	2,102	$	1,125	$	289	$	5	$	9,392

Note 4. Loans/Leases Receivable (continued)

The following tables show the credit quality indicator of loans by class of receivable and year of origination as of December 31, 2022:

	2022
	Term Loans
	Amortized Cost Basis by Origination Year
													Revolving
													Loans
Internally Assigned													Amortized
Risk Rating	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
	(dollars in thousands)
C&I - revolving
Pass (Ratings 1 through 5)	$	—	$	—	$	—	$	—	$	—	$	—	$	275,888	$	275,888
Special Mention (Rating 6)		—		—		—		—		—		—		17,595		17,595
Substandard (Rating 7)		—		—		—		—		—		—		3,386		3,386
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total C&I - revolving	$	—	$	—	$	—	$	—	$	—	$	—	$	296,869	$	296,869
C&I - other
Pass (Ratings 1 through 5)	$	496,445	$	279,412	$	127,803	$	87,054	$	59,675	$	105,184	$	—	$	1,155,573
Special Mention (Rating 6)		9,542		679		901		723		—		308		—		12,153
Substandard (Rating 7)		187		125		661		4,535		310		106		—		5,924
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total C&I - other	$	506,174	$	280,216	$	129,365	$	92,312	$	59,985	$	105,598	$	—	$	1,173,650
CRE - owner occupied
Pass (Ratings 1 through 5)	$	146,211	$	182,440	$	142,596	$	33,571	$	27,088	$	45,993	$	13,460	$	591,359
Special Mention (Rating 6)		6,190		—		6,379		484		—		1,346		269		14,668
Substandard (Rating 7)		3,750		171		16,336		1,396		1,197		490		—		23,340
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total CRE - owner occupied	$	156,151	$	182,611	$	165,311	$	35,451	$	28,285	$	47,829	$	13,729	$	629,367
CRE - non-owner occupied
Pass (Ratings 1 through 5)	$	310,163	$	221,953	$	173,478	$	89,337	$	56,898	$	40,923	$	7,510	$	900,262
Special Mention (Rating 6)		2,824		882		18,920		—		12,917		6,198		—		41,741
Substandard (Rating 7)		5,651		—		157		15,217		—		—		211		21,236
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total CRE - non-owner occupied	$	318,638	$	222,835	$	192,555	$	104,554	$	69,815	$	47,121	$	7,721	$	963,239
Construction and land development
Pass (Ratings 1 through 5)	$	479,016	$	330,434	$	240,778	$	31,607	$	30,300	$	—	$	29,647	$	1,141,782
Special Mention (Rating 6)		1,465		9,200		—		—		—		—		—		10,665
Substandard (Rating 7)		132		10,262		—		—		—		—		—		10,394
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total Construction and land development	$	480,613	$	349,896	$	240,778	$	31,607	$	30,300	$	—	$	29,647	$	1,162,841
Multi-family
Pass (Ratings 1 through 5)	$	237,839	$	254,056	$	224,920	$	134,378	$	99,695	$	7,875	$	2,227	$	960,990
Special Mention (Rating 6)		—		44		—		1,467		—		—		—		1,511
Substandard (Rating 7)		—		—		1,302		—		—		—		—		1,302
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total Multi-family	$	237,839	$	254,100	$	226,222	$	135,845	$	99,695	$	7,875	$	2,227	$	963,803
1-4 family real estate
Pass (Ratings 1 through 5)	$	61,953	$	57,731	$	33,737	$	12,687	$	5,813	$	6,002	$	5,855	$	183,778
Special Mention (Rating 6)		—		—		—		—		—		—		—		—
Substandard (Rating 7)		28		—		—		5		—		—		—		33
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total 1-4 family real estate	$	61,981	$	57,731	$	33,737	$	12,692	$	5,813	$	6,002	$	5,855	$	183,811
Consumer
Pass (Ratings 1 through 5)	$	511	$	801	$	493	$	122	$	254	$	621	$	10,226	$	13,028
Special Mention (Rating 6)		—		—		—		—		—		—		—		—
Substandard (Rating 7)		282		—		12		—		112		—		—		406
Doubtful (Rating 8)		—		—		—		—		—		—		—		—
Total Consumer	$	793	$	801	$	505	$	122	$	366	$	621	$	10,226	$	13,434
Total	$	1,762,189	$	1,348,190	$	988,473	$	412,583	$	294,259	$	215,046	$	366,274	$	5,387,014

Note 4. Loans/Leases Receivable (continued)

	2022
	Term Loans
	Amortized Cost Basis by Origination Year												Revolving
													Loans
													Amortized
Delinquency Status *	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
	(dollars in thousands)
C&I - other
Performing	$	170,180	$	69,694	$	25,540	$	8,066	$	1,804	$	79	$	—	$	275,363
Nonperforming		1,110		1,320		155		95		—		—		—		2,680
Total C&I - other	$	171,290	$	71,014	$	25,695	$	8,161	$	1,804	$	79	$	—	$	278,043
Direct financing leases
Performing	$	14,578	$	5,172	$	5,700	$	4,398	$	1,536	$	370	$	—	$	31,754
Nonperforming		—		32		88		7		8		—		—		135
Total Direct financing leases	$	14,578	$	5,204	$	5,788	$	4,405	$	1,544	$	370	$	—	$	31,889
Construction and land development
Performing	$	28,785	$	360	$	10	$	3	$	62	$	—	$	—	$	29,220
Nonperforming		—		—		—		—		—		—		—		—
Total Construction and land development	$	28,785	$	360	$	10	$	3	$	62	$	—	$	—	$	29,220
1-4 family real estate
Performing	$	69,094	$	92,762	$	75,153	$	17,089	$	11,381	$	48,136	$	90	$	313,705
Nonperforming		267		524		487		279		8		448		—		2,013
Total 1-4 family real estate	$	69,361	$	93,286	$	75,640	$	17,368	$	11,389	$	48,584	$	90	$	315,718
Consumer
Performing	$	14,685	$	3,844	$	3,717	$	1,123	$	1,140	$	1,325	$	70,974	$	96,808
Nonperforming		7		—		—		—		3		59		110		179
Total Consumer	$	14,692	$	3,844	$	3,717	$	1,123	$	1,143	$	1,384	$	71,084	$	96,987
Total	$	298,706	$	173,708	$	110,850	$	31,060	$	15,942	$	50,417	$	71,174	$	751,857

All loan and lease modifications to borrowers experiencing financial difficulty during 2023 as well as TDR balances and activity during 2022 and 2021 were immaterial.

Changes in the ACL for OBS exposures for the year ended December 31, 2023 and 2022 is presented as follows:

	Year Ended
	December 31, 2023		December 31, 2022
Balance, beginning	$	5,552	$	6,886
Provisions (credited) to expense		3,977		(1,334)
Balance, ending	$	9,529	$	5,552

Loans are made in the normal course of business to directors, executive officers, and their related interests. All such loans, in the opinion of management, were made in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not related to the lenders and did not involve more than the normal risk of collectability or present other unfavorable

Note 4. Loans/Leases Receivable (continued)

features. An analysis of the changes in the aggregate committed amount of loans to insiders greater than or equal to $60,000 during the years ended December 31, 2023, 2022, and 2021, is as follows:

	2023		2022		2021
	(dollars in thousands)
Balance, beginning	$	113,200	$	100,898	$	100,361
Net increase (decrease) due to change in related parties		2,200		3,496		(18,832)
Advances		23,977		51,683		42,817
Repayments		(13,414)		(42,877)		(23,448)
Balance, ending	$	125,963	$	113,200	$	100,898

The Company’s loan portfolio includes a geographic concentration in the Midwest. Additionally, the loan portfolio includes a concentration of loans in certain industries as of December 31, 2023 and 2022 as follows:

	2023				2022
			Percentage of				Percentage of
			Total				Total
Industry Name	Balance		Loans/Leases		Balance		Loans/Leases
	(dollars in thousands)
Lessors of Residential Buildings*	$	2,328,875	36	%	$	2,168,431	35	%
Lessors of Non-Residential Buildings		673,719	10	%		558,719	9	%

* Includes loans on LIHTC projects