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Loans, Allowance for Credit Losses, and Asset Quality Information
 3 Months Ended
Mar. 31, 2024
Receivables [Abstract]  
Loans, Allowance for Credit Losses, and Asset Quality Information Loans, Allowance for Credit Losses, and Asset Quality Information
The following is a summary of the major categories of total loans outstanding:
($ in thousands)March 31, 2024December 31, 2023
 AmountPercentageAmountPercentage
Commercial and industrial$872,623 11 %$905,862 11 %
Construction, development & other land loans904,216 11 %992,980 12 %
Commercial real estate - owner occupied1,238,759 15 %1,259,022 16 %
Commercial real estate - non owner occupied2,524,221 31 %2,528,060 31 %
Multi-family real estate457,142 6 %421,376 5 %
Residential 1-4 family real estate1,684,173 21 %1,639,469 20 %
Home equity loans/lines of credit328,466 4 %335,068 4 %
Consumer loans66,666 1 %68,443 1 %
Subtotal8,076,266 100 %8,150,280 100 %
Unamortized net deferred loan fees240 (178)
Total loans$8,076,506 $8,150,102 

Also included in the table above are various SBA loans, generally originated under the SBA 7A program, with additional information on these loans presented in the table below.
($ in thousands)March 31, 2024December 31, 2023
Guaranteed portions of SBA loans included in table above$35,984 35,462 
Unguaranteed portions of SBA loans included in table above106,375 107,784 
Total SBA loans included in the table above$142,359 143,246 
Sold portions of SBA loans with servicing retained - not included in tables above$344,115 349,275 

At March 31, 2024 and December 31, 2023, there were remaining unaccreted discounts on the retained portion of sold SBA loans amounting to $3.4 million and $3.5 milion, respectively.

At March 31, 2024 and December 31, 2023, loans in the amount of $6.5 billion were pledged as collateral for certain borrowings.

At March 31, 2024 and December 31, 2023, total loans included loans to executive officers and directors of the Company, and their associates, totaling approximately $64.6 million and $63.7 million, respectively. There were no new loans, advances on existing loans totaled approximately $1.4 million for the three months ended March 31, 2024, and repayments amounted to $0.5 million for that period. Available credit on related party loans totaled $1.2 million and $2.7 million at March 31, 2024 and December 31, 2023, respectively.
As of March 31, 2024 and December 31, 2023, unamortized discounts on all acquired loans totaled $21.6 million and $24.0 million, respectively. Loan discounts are generally amortized as yield adjustments over the respective lives of the loans, so long as the loans perform.
Nonperforming assets ("NPAs") are defined as nonaccrual loans, modifications to borrowers in financial distress, loans past due 90 or more days and still accruing interest, and foreclosed real estate.
The following table summarizes the NPAs for each period presented.
($ in thousands)March 31,
2024		December 31,
2023
Nonaccrual loans$35,622 32,208 
Modifications to borrowers in financial distress10,999 11,719 
Total nonperforming loans46,621 43,927 
Foreclosed real estate926 862 
Total nonperforming assets$47,547 44,789 
At March 31, 2024 and December 31, 2023, the Company had $1.6 million and $1.0 million, respectively, in residential mortgage loans in the process of foreclosure.
At March 31, 2024 and December 31, 2023, there was one loan with a commitment to lend an immaterial amount of additional funds to a borrower whose loan was nonperforming.
The following table is a summary of the Company’s nonaccrual loans by major categories as of March 31, 2024:
($ in thousands)Nonaccrual Loans with No AllowanceNonaccrual Loans with an AllowanceTotal Nonaccrual Loans
Commercial and industrial$544 12,157 12,701 
Construction, development & other land loans— 61 61 
Commercial real estate - owner occupied879 8,089 8,968 
Commercial real estate - non owner occupied1,890 5,042 6,932 
Residential 1-4 family real estate1,035 3,462 4,497 
Home equity loans/lines of credit525 1,787 2,312 
Consumer loans— 151 151 
Total$4,873 30,749 35,622 

The following table is a summary of the Company’s nonaccrual loans by major categories as of December 31, 2023:
($ in thousands)Nonaccrual Loans with No AllowanceNonaccrual Loans with an AllowanceTotal Nonaccrual Loans
Commercial and industrial$944 8,932 9,876 
Construction, development & other land loans— 399 399 
Commercial real estate - owner occupied960 6,082 7,042 
Commercial real estate - non owner occupied6,121 1,082 7,203 
Residential 1-4 family real estate— 4,843 4,843 
Home equity loans/lines of credit534 2,169 2,703 
Consumer loans— 142 142 
Total$8,559 23,649 32,208 

There was no interest income recognized during the periods presented on nonaccrual loans. The Company follows its nonaccrual policy of reversing contractual interest income in the income statement when the Company places a loan on nonaccrual status.

The following table represents the accrued interest receivables written off by reversing interest income during each period indicated:
($ in thousands)Three Months Ended March 31, 2024For the Year Ended December 31,
2023		Three Months Ended March 31, 2023
Commercial and industrial$216 225 123 
Construction, development & other land loans— 10 — 
Commercial real estate - owner occupied148 124 11 
Commercial real estate - non owner occupied— 186 5 
Residential 1-4 family real estate29 38 8 
Home equity loans/lines of credit7 57 9 
Consumer loans— 2 — 
Total$400 642 156 
The following table presents an analysis of the payment status of the Company’s loans as of March 31, 2024:
($ in thousands)Accruing
30-59
Days Past
Due		Accruing
60-89
Days
Past
Due		Nonaccrual
Loans		Accruing
Current		Total Loans
Receivable
Commercial and industrial$1,850 257 12,701 857,815 872,623 
Construction, development & other land loans388 — 61 903,767 904,216 
Commercial real estate - owner occupied1,055 — 8,968 1,228,736 1,238,759 
Commercial real estate - non owner occupied6,944 95 6,932 2,510,250 2,524,221 
Multi-family real estate— — — 457,142 457,142 
Residential 1-4 family real estate15,682 — 4,497 1,663,994 1,684,173 
Home equity loans/lines of credit696 222 2,312 325,236 328,466 
Consumer loans182 66 151 66,267 66,666 
Total$26,797 640 35,622 8,013,207 8,076,266 
Unamortized net deferred loan fees240 
Total loans8,076,506 

The following table presents an analysis of the payment status of the Company’s loans as of December 31, 2023:
($ in thousands)Accruing
30-59
Days
Past
Due		Accruing
60-89
Days
Past
Due		Nonaccrual
Loans		Accruing
Current		Total Loans
Receivable
Commercial and industrial$3,726 257 9,876 892,003 905,862 
Construction, development & other land loans241 256 399 992,084 992,980 
Commercial real estate - owner occupied906 404 7,042 1,250,670 1,259,022 
Commercial real estate - non owner occupied361 — 7,203 2,520,496 2,528,060 
Multi-family real estate— — — 421,376 421,376 
Residential 1-4 family real estate18,868 3,401 4,843 1,612,357 1,639,469 
Home equity loans/lines of credit603 349 2,703 331,413 335,068 
Consumer loans270 131 142 67,900 68,443 
Total$24,975 4,798 32,208 8,088,299 8,150,280 
Unamortized net deferred loan fees(178)
Total loans8,150,102 
Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. The Company reviews individually evaluated loans on nonaccrual with a net book balance of $500,000 or greater for designation as collateral dependent loans, as well as certain other loans that may still be accruing interest and/or are less than $500,000 in size that management of the Company designates as having higher risk. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the ACL.
The following table presents an analysis of collateral dependent loans of the Company as of March 31, 2024:
($ in thousands)Residential PropertyBusiness AssetsCommercial PropertyTotal Collateral-Dependent Loans
Commercial and industrial$— 878 — 878 
Construction, development & other land loans— 263 3,452 3,715 
Commercial real estate - owner occupied— — 8,645 8,645 
Commercial real estate - non owner occupied— — 15,444 15,444 
Residential 1-4 family real estate1,035 — — 1,035 
Home equity loans/lines of credit525 — — 525 
Total$1,560 1,141 27,541 30,242 
The following table presents an analysis of collateral dependent loans of the Company as of December 31, 2023:
($ in thousands)Residential PropertyBusiness AssetsCommercial PropertyTotal Collateral-Dependent Loans
Commercial and industrial$— 2,385 — 2,385 
Commercial real estate - owner occupied— — 1,142 1,142 
Commercial real estate - non owner occupied— — 6,121 6,121 
Home equity loans/lines of credit534 — — 534 
Total$534 2,385 7,263 10,182 

Under CECL, for collateral dependent loans, the Company has adopted the practical expedient to measure the ACL based on the fair value of collateral. The ACL is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required.

The Company's policy is to obtain third-party appraisals on any significant pieces of collateral. For loans secured by real estate, the Company's policy is to write nonaccrual loans down to 90% of the appraised value, which considers estimated selling costs that are usually incurred when disposing of real estate collateral. For real estate collateral that is in industries which may be undergoing heightened stress due to economic or other external factors, the Company may reduce the collateral values by an additional 10-25% of appraised value to recognize additional discounts that are estimated to be incurred in a near-term sale. For non-real estate collateral secured loans, the Company generally writes nonaccrual loans down to 75% of the appraised value, which provides for selling costs and liquidity discounts that are usually incurred when disposing of non real estate collateral. For reviewed loans that are not on nonaccrual basis, the Company assigns a specific allowance based on the parameters noted above.

The following tables presents the activity in the ACL on loans for each of the periods indicated. Fluctuations in the ACL each period are based on loan mix and growth, changes in the levels of nonperforming loans, economic forecasts impacting loss drivers, other assumptions and inputs to the CECL model, and as occurred in 2023, adjustments for acquired loan portfolios. The change to the level of ACL during the three months ended March 31, 2024 was determined based primarily on updated economic forecasts, which are a key assumption in the CECL model and which indicated a continued deterioration of the commercial real estate index, thus projecting a higher allowance for credit losses balance, partially offset by reductions in loan balances during the period.

($ in thousands)Beginning balanceCharge-offsRecoveriesProvisions / (Reversals)Ending balance
As of and for the three months ended March 31, 2024
Commercial and industrial$21,227 (1,585)243 409 20,294 
Construction, development & other land loans13,940 (79)97 (2,175)11,783 
Commercial real estate - owner occupied18,218 (58)4 (1)18,163 
Commercial real estate - non owner occupied24,916 (158)2 1,492 26,252 
Multi-family real estate3,825 — — 597 4,422 
Residential 1-4 family real estate21,396 — 121 1,187 22,704 
Home equity loans/lines of credit3,339 — 5 (8)3,336 
Consumer loans2,992 (235)57 299 3,113 
Total$109,853 (2,115)529 1,800 110,067 
($ in thousands)Beginning balanceInitial ACL for acquired PCD loansCharge-offsRecoveriesProvisions / (Reversals)Ending balance
As of and for the year ended December 31, 2023
Commercial and industrial$17,718 5,197 (8,358)1,393 5,277 21,227 
Construction, development & other land loans15,128 49 (120)370 (1,487)13,940 
Commercial real estate - owner occupied14,972 191 (144)465 2,734 18,218 
Commercial real estate - non owner occupied22,780 51 (235)737 1,583 24,916 
Multi-family real estate2,957 — — 13 855 3,825 
Residential 1-4 family real estate11,354 113 (4)377 9,556 21,396 
Home equity loans/lines of credit3,158 8 (309)98 384 3,339 
Consumer loans2,900 1 (1,005)248 848 2,992 
Total$90,967 5,610 (10,175)3,701 19,750 109,853 

($ in thousands)Beginning balanceInitial ACL for acquired PCD loansCharge-offsRecoveriesProvisions / (Reversals)Ending balance
As of and for the three months ended March 31, 2023
Commercial and industrial$17,718 5,197 (2,177)274 2,061 23,073 
Construction, development & other land loans15,128 49 — 65 3,744 18,986 
Commercial real estate - owner occupied14,972 191 — 36 883 16,082 
Commercial real estate - non owner occupied22,780 51 (235)394 3,000 25,990 
Multi-family real estate2,957 — — 4 243 3,204 
Residential 1-4 family real estate11,354 113 — 146 672 12,285 
Home equity loans/lines of credit3,158 8 (2)34 283 3,481 
Consumer loans2,900 1 (207)36 565 3,295 
Total$90,967 5,610 (2,621)989 11,451 106,396 
Credit Quality Indicators
The Company tracks credit quality based on its internal risk ratings. Upon origination, a loan is assigned an initial risk grade, which is generally based on several factors such as the borrower’s credit score, the loan-to-value ratio, the debt-to-income ratio, etc. Loans that are risk-graded as substandard during the origination process are declined. After loans are initially graded, they are monitored regularly for credit quality based on many factors, such as payment history, the borrower’s financial status, and changes in collateral value. Loans can be downgraded or upgraded depending on management’s evaluation of these factors. Internal risk-grading policies are consistent throughout each loan type.
The following describes the Company’s internal risk grades in ascending order of likelihood of loss:
Risk GradeDescription
Pass:
1Loans with virtually no risk, including cash secured loans.
2Loans with documented significant overall financial strength.  These loans have minimum chance of loss due to the presence of multiple sources of repayment – each clearly sufficient to satisfy the obligation.
3Loans with documented satisfactory overall financial strength.  These loans have a low loss potential due to presence of at least two clearly identified sources of repayment – each of which is sufficient to satisfy the obligation under the present circumstances.
4Loans to borrowers with acceptable financial condition.  These loans could have signs of minor operational weaknesses, lack of adequate financial information, or loans supported by collateral with questionable value or marketability.  
5Loans that represent above average risk due to minor weaknesses and warrant closer scrutiny by management.  Collateral is generally required and believed to provide reasonable coverage with realizable liquidation values in normal circumstances.  Repayment performance is satisfactory.
P
(Pass)		Consumer loans that are of satisfactory credit quality with borrowers who exhibit good personal credit history, average personal financial strength and moderate debt levels.  These loans generally conform to Bank policy, but may include approved mitigated exceptions to the guidelines.  
Special Mention:
6Existing loans with defined weaknesses in primary source of repayment that, if not corrected, could cause a loss to the Bank.
Classified:
7An existing loan inadequately protected by the current sound net worth and paying capacity of the obligor or the collateral pledged, if any.  These loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.
8Loans that have a well-defined weakness that make the collection or liquidation in full highly questionable and improbable.  Loss appears imminent, but the exact amount and timing is uncertain.
9Loans that are considered uncollectible and are in the process of being charged-off.  This grade is a temporary grade assigned for administrative purposes until the charge-off is completed.
F
(Fail)		Consumer loans with a well-defined weakness, such as exceptions of any kind with no mitigating factors, history of paying outside the terms of the note, insufficient income to support the current level of debt, etc.

In the tables that follow, substantially all of the "Classified" loans have grades of 7 or Fail, with those categories having similar levels of risk.

The tables below present the Company’s recorded investment in loans by credit quality indicators by year of origination or renewal as of the periods indicated. Acquired loans are presented in the year originated, not in the year of acquisition.
Term Loans by Year of Origination
($ in thousands)20242023202220212020PriorRevolvingTotal
As of March 31, 2024
Commercial and industrial
Pass$25,321 106,744 143,282 99,028 79,075 110,534 287,258 851,242 
Special Mention— 86 50 1,877 156 1,932 3,114 7,215 
Classified50 84 2,655 617 767 8,967 1,026 14,166 
Total commercial and industrial25,371 106,914 145,987 101,522 79,998 121,433 291,398 872,623 
Gross charge-offs, YTD— — 255 — 121 215 994 1,585 
Construction, development & other land loans
Pass32,667 317,237 292,169 91,160 29,049 58,583 77,377 898,242 
Special Mention— 377 891 — 158 3,931 16 5,373 
Classified1 — 390 — 67 143 — 601 
Total construction, development & other land loans32,668 317,614 293,450 91,160 29,274 62,657 77,393 904,216 
Gross charge-offs, YTD— 79 — — — — — 79 
Commercial real estate - owner occupied
Pass14,382 136,686 234,302 247,327 186,254 367,230 15,762 1,201,943 
Special Mention— 740 3,939 4,454 296 12,373 — 21,802 
Classified— 73 1,477 1,549 1,206 10,652 57 15,014 
Total commercial real estate - owner occupied14,382 137,499 239,718 253,330 187,756 390,255 15,819 1,238,759 
Gross charge-offs, YTD— — — — — 58 — 58 
Commercial real estate - non owner occupied
Pass18,100 223,154 615,013 703,015 304,502 605,654 28,277 2,497,715 
Special Mention— — 161 — — 17,805 1,450 19,416 
Classified— — — 658 4,233 2,199 — 7,090 
Total commercial real estate - non owner occupied18,100 223,154 615,174 703,673 308,735 625,658 29,727 2,524,221 
Gross charge-offs, YTD— — — — — 158 — 158 
Multi-family real estate
Pass8,262 25,784 118,826 168,105 65,299 46,319 23,876 456,471 
Special Mention— — — — — 671 — 671 
Classified— — — — — — — — 
Total multi-family real estate8,262 25,784 118,826 168,105 65,299 46,990 23,876 457,142 
Gross charge-offs, YTD— — — — — — — — 
Residential 1-4 family real estate
Pass91,863 275,322 417,272 302,005 179,607 404,016 3,171 1,673,256 
Special Mention— — — 31 63 1,471 — 1,565 
Classified262 — — 462 1,194 7,434 — 9,352 
Total residential 1-4 family real estate92,125 275,322 417,272 302,498 180,864 412,921 3,171 1,684,173 
Gross charge-offs, YTD— — — — — — — — 
Home equity loans/lines of credit
Pass233 2,481 833 533 290 2,614 313,602 320,586 
Special Mention— — — 122 — 165 17 304 
Classified— — — 93 91 285 7,107 7,576 
Total home equity loans/lines of credit233 2,481 833 748 381 3,064 320,726 328,466 
Gross charge-offs, YTD— — — — — — — — 
Consumer loans
Pass4,366 14,673 11,269 4,156 1,833 753 29,307 66,357 
Special Mention— — — — — — — — 
Classified134 23 38 43 — 35 36 309 
Total consumer loans4,500 14,696 11,307 4,199 1,833 788 29,343 66,666 
Gross charge-offs, YTD— 4 16 2 — — 213 235 
Total loans$195,641 1,103,464 1,842,567 1,625,235 854,140 1,663,766 791,453 8,076,266 
Unamortized net deferred loan fees240 
Total loans, net of deferred loan fees8,076,506 
Total gross charge-offs, year to date$— 83 271 2 121 431 1,207 2,115 
Term Loans by Year of Origination
($ in thousands)20232022202120202019PriorRevolvingTotal
As of December 31, 2023
Commercial and industrial
Pass$136,735 161,131 111,069 75,312 38,495 60,626 302,684 886,052 
Special Mention2,832 2,547 167 185 448 672 1,135 7,986 
Classified1,626 1,152 720 1,389 1,647 4,487 803 11,824 
Total commercial and industrial141,193 164,830 111,956 76,886 40,590 65,785 304,622 905,862 
Gross charge-offs, YTD171 1,036 713 537 821 1,547 3,533 8,358 
Construction, development & other land loans
Pass563,998 231,450 90,374 16,662 11,598 5,816 70,852 990,750 
Special Mention489 273 59 — 2 4 19 846 
Classified657 708 — — 8 11 — 1,384 
Total construction, development & other land loans565,144 232,431 90,433 16,662 11,608 5,831 70,871 992,980 
Gross charge-offs, YTD— — — — — 120 — 120 
Commercial real estate - owner occupied
Pass210,449 323,852 299,135 196,343 92,452 86,784 23,198 1,232,213 
Special Mention338 2,533 271 817 5,755 2,253 — 11,967 
Classified4,456 1,505 1,721 895 2,288 3,904 73 14,842 
Total commercial real estate - owner occupied215,243 327,890 301,127 198,055 100,495 92,941 23,271 1,259,022 
Gross charge-offs, YTD— — 49 — — 92 3 144 
Commercial real estate - non owner occupied
Pass509,596 748,854 722,472 287,235 119,515 84,690 29,001 2,501,363 
Special Mention11,353 199 36 393 1,183 5,942 342 19,448 
Classified871 32 14 4,214 634 1,484 — 7,249 
Total commercial real estate - non owner occupied521,820 749,085 722,522 291,842 121,332 92,116 29,343 2,528,060 
Gross charge-offs, YTD— — 235 — — — — 235 
Multi-family real estate
Pass57,378 137,533 139,879 43,881 12,231 10,323 20,151 421,376 
Special Mention— — — — — — — — 
Classified— — — — — — — — 
Total multi-family real estate57,378 137,533 139,879 43,881 12,231 10,323 20,151 421,376 
Gross charge-offs, YTD— — — — — — — — 
Residential 1-4 family real estate
Pass363,410 400,483 317,515 186,459 94,567 260,102 3,247 1,625,783 
Special Mention681 41 202 64 587 1,987 — 3,562 
Classified1,848 50 474 741 472 6,539 — 10,124 
Total residential 1-4 family real estate365,939 400,574 318,191 187,264 95,626 268,628 3,247 1,639,469 
Gross charge-offs, YTD— — — — — 4 — 4 
Home equity loans/lines of credit
Pass2,830 1,136 1,141 223 499 1,233 319,199 326,261 
Special Mention163 — 122 — — — 18 303 
Classified255 — 146 91 112 10 7,890 8,504 
Total home equity loans/lines of credit3,248 1,136 1,409 314 611 1,243 327,107 335,068 
Gross charge-offs, YTD— — — — — — 309 309 
Consumer loans
Pass16,497 12,906 4,999 2,173 432 429 30,757 68,193 
Special Mention— — — — — — — — 
Classified130 7 45 — 3 34 31 250 
Total consumer loans16,627 12,913 5,044 2,173 435 463 30,788 68,443 
Gross charge-offs, YTD34 79 73 23 — 1 795 1,005 
Total loans$1,886,592 2,026,392 1,690,561 817,077 382,928 537,330 809,400 8,150,280 
Unamortized net deferred loan fees(178)
Total loans, net of deferred loan fees8,150,102 
Total gross charge-offs, year to date$205 1,115 1,070 560 821 1,764 4,640 10,175 
Loan Modifications to Borrowers Experiencing Financial Difficulty
Occasionally, the Company modifies loans to borrowers in financial distress as a part of our loss mitigation activities. Various types of modification may be offered including principal forgiveness, term extension, payment delays, or interest rate reductions. In some cases, the Company will modify a certain loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession may be granted. For loans included in the “combination” columns below, multiple types of modifications have been made on the same loan within the current reporting period.

The followings tables present the amortized cost basis at March 31, 2024 and March 31, 2023 of the loans modified during the three months then ended for borrowers experiencing financial difficulty, by loan category and type of concession granted.

($ in thousands)Payment DelayTerm ExtensionCombination - Term Extension and Payment DelayCombination - Interest Rate Reduction and Term ExtensionTotalPercent of Total Class of Loans
As of and for the three months ended March 31, 2024
Commercial and industrial$114 — 878 — 992 0.11 %
Commercial real estate - non owner occupied— 115 — — 115 — %
Home equity loans/lines of credit— 47 — 179 226 0.07 %
Total$114 162 878 179 1,333 0.02 %
($ in thousands)Payment DelayTerm ExtensionCombination - Interest Rate Reduction and Term ExtensionTotalPercent of Total Class of Loans
As of and for the three months ended March 31, 2023
Commercial and industrial$156 1,442 — 1,598 0.18 %
Construction, development & other land loans— 130 14 144 0.01 %
Commercial real estate - non owner occupied— 104 — 104 — %
Residential 1-4 family real estate— 48 — 48 — %
Home equity loans/lines of credit— 103 — 103 0.03 %
Consumer loans— 228 — 228 0.34 %
Total$156 2,055 14 2,225 0.03 %
For the three months ended March 31, 2024 and March 31, 2023, there were no modifications for borrowers experiencing financial difficulty with principal forgiveness concessions.
The following table describes the financial effect for the three months ended March 31, 2024 of the modifications made for borrowers experiencing financial difficulty:
Financial Effect of Modification to Borrowers Experiencing Financial Difficulty
Weighted Average Interest Rate ReductionWeighted Average Payment Delay
(in months)		Weighted Average Term Extension
(in months)
For the three months ended March 31, 2024
Commercial and industrial—%3612
Commercial real estate - non owner occupied—%013
Home equity loans/lines of credit2.09%032
The following table describes the financial effect for the three months ended March 31, 2023 of the modifications made for borrowers experiencing financial difficulty:
Financial Effect of Modification to Borrowers Experiencing Financial Difficulty
Weighted Average Interest Rate ReductionWeighted Average Payment Delay
(in months)		Weighted Average Term Extension
(in months)
For the three months ended March 31, 2023
Commercial and industrial—%46
Construction, development & other land loans1.50%011
Commercial real estate - non owner occupied—%012
Residential 1-4 family real estate—%014
Home equity loans/lines of credit—%046
Consumer loans—%03
The Company closely monitors the performance of the loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified in the last 12 months as of March 31, 2024:
Payment Status (Amortized Cost Basis)
($ in thousands)Current30-59 Days Past Due60-89 Days Past Due90+ Days Past Due
Commercial and industrial$2,186 69 — — 
Construction, development & other land loans131 — — — 
Commercial real estate - owner occupied4,378 — — — 
Commercial real estate - non owner occupied115 — — — 
Residential 1-4 family real estate595 76 — — 
Home equity loans/lines of credit3,111 — — — 
Consumer loans3 — — — 
$10,519 145 — — 
The following table depicts the performance of loans that have been modified in the last 12 months as of December 31, 2023:
Payment Status (Amortized Cost Basis)
($ in thousands)Current30-59 Days Past Due60-89 Days Past Due90+ Days Past Due
Commercial and industrial$2,841 — — — 
Construction, development & other land loans362 — — — 
Commercial real estate - owner occupied4,455 — — — 
Commercial real estate - non owner occupied206 — — — 
Residential 1-4 family real estate656 79 — — 
Home equity loans/lines of credit3,114 — — — 
Consumer loans6 — — — 
$11,640 79 — — 
None of the modifications made for borrowers experiencing financial difficulty during the three months ended March 31, 2024 and March 31, 2023 are considered to have had a payment default.
Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the ACL is adjusted by the same amount.
Concentration of Credit Risk
Most of the Company's business activity is with customers located within the markets where it has banking operations. Therefore, the Company’s exposure to credit risk is significantly affected by changes in the economy within its markets. Approximately 88% of the Company's loan portfolio is secured by real estate and is therefore susceptible to changes in real estate valuations. There have been no material changes to the primary loan markets (as identified by counties) from year end.
Allowance for Unfunded Loan Commitments
In addition to the ACL on loans, the Company maintains an allowance for lending-related commitments such as unfunded loan commitments and letters of credit. The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for lending-related commitments on off-balance sheet credit exposures is adjusted as a provision for unfunded commitments expense. The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding study derived from internal information, and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the ACL on loans. The allowance for unfunded loan commitments of $10.8 million and $11.4 million at March 31, 2024 and December 31, 2023, respectively, were separately classified on the consolidated balance sheets within "Other liabilities."
The following table presents the balance and activity in the allowance for unfunded loan commitments for the three months ended March 31, 2024 and 2023 and for the twelve months ended December 31, 2023:
($ in thousands)March 31, 2024December 31, 2023March 31, 2023
Beginning balance$11,369 13,306 13,306 
Initial provision for credit losses on unfunded commitments acquired from GrandSouth— 1,921 1,921 
Charge-offs— — — 
Recoveries— — — 
Reversal of provision for unfunded commitments(601)(3,858)(870)
Ending balance$10,768 11,369 14,357 

Allowance for Credit Losses - Securities Held to Maturity
The ACL for securities held to maturity was insignificant at March 31, 2024 and December 31, 2023.