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Loans and Allowance for Credit Losses | 9 Months Ended
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Sep. 30, 2024
Receivables [Abstract] |
Loans and Allowance for Credit Losses | Loans and Allowance for Credit Losses During the nine months ended September 30, 2024, $686.9 million in CCBX loans were transferred to loans held for sale, with $679.4 million in loans sold. The Company sells CCBX loans back to the originating partner to manage loan portfolio size by partner and by loan category, with such limits established and documented in the relevant partner agreement. There were $7.6 million loans held for sale as of September 30, 2024 and no loans held for sale as of December 31, 2023. The composition of the loan portfolio is as follows as of the periods indicated:
| September 30, |  | December 31,
| 2024 |  | 2023
| (dollars in thousands; unaudited)
Community Bank |  |  |
Commercial and industrial loans | $ | 152,161 |  |  | $ | 149,502 |
Real estate loans: |  |  |
Construction, land and land development loans | 163,051 |  |  | 157,100 |
Residential real estate loans | 212,467 |  |  | 225,391 |
Commercial real estate loans | 1,362,452 |  |  | 1,303,533 |
Consumer and other loans: |  |  |
Other consumer and other loans | 14,173 |  |  | 1,628 |
Gross Community Bank loans receivable | 1,904,304 |  |  | 1,837,154 |
CCBX |  |  |
Commercial and industrial loans: |  |  |
Capital call lines | $ | 103,924 |  |  | $ | 87,494 |
All other commercial & industrial loans | 36,494 |  |  | 54,298 |
Real estate loans: |  |  |
Residential real estate loans | 265,402 |  |  | 238,035 |
Consumer and other loans: |  |  |
Credit cards | 633,691 |  |  | 505,837 |
Other consumer and other loans | 482,228 |  |  | 310,574 |
Gross CCBX loans receivable | 1,521,739 |  |  | 1,196,238 |
Total gross loans receivable | 3,426,043 |  |  | 3,033,392 |
Net deferred origination fees and premiums | (7,211) |  |  | (7,300) |
Loans receivable | $ | 3,418,832 |  |  | $ | 3,026,092 |
Accrued interest on loans, which is excluded from the balances in the preceding table of loans receivable, was $22.8 million and $25.6 million at September 30, 2024 and December 31, 2023, respectively, and was included in accrued interest receivable on the Company's consolidated balance sheets. Included in commercial and industrial loans as of September 30, 2024 and December 31, 2023, is $103.9 million and $87.5 million, respectively in capital call lines, provided to venture capital firms through one of our BaaS clients. These loans are secured by the capital call rights and are individually underwritten to the Bank’s credit standards by our BaaS client and the underwriting is reviewed by the Bank on every line/loan. Also included in commercial and industrial loans are Paycheck Protection Program (“PPP”) loans of $2.5 million at September 30, 2024 and $3.0 million at December 31, 2023. PPP loans are 100% guaranteed by the Small Business Administration (“SBA”). Consumer and other loans includes overdrafts of $9.1 million and $2.8 million at September 30, 2024 and December 31, 2023, respectively. Community bank overdrafts were $6,000 and $255,000 at September 30, 2024 and December 31, 2023, respectively and CCBX overdrafts were $9.1 million and $2.5 million at September 30, 2024 and December 31, 2023. The Company has pledged loans totaling $944.2 million at September 30, 2024 and $982.2 million at December 31, 2023, for borrowing lines at the FHLB and FRB. Loans are pledged to increase and maintain the borrowing capacity of the Bank in the event of a liquidity crisis. The balance of SBA and United States Department of Agriculture ("USDA") loans and participations sold and serviced for others totaled $4.5 million and $8.7 million at September 30, 2024 and December 31, 2023, respectively. The gross balance of Main Street Lending Program (“MSLP”) loans participated and serviced for others, totaled $51.4 million at September 30, 2024 and $53.4 million at December 31, 2023, with $2.7 million in MSLP loans on the balance sheet and included in commercial and industrial loans at September 30, 2024 compared to $2.8 million at December 31, 2023. Servicing is retained on the gross balance. The Company, through the community bank, at times purchases individual loans at fair value as of the acquisition date. The Company held purchased loans with remaining balances that totaled $6.2 million and $8.1 million as of September 30, 2024 and December 31, 2023, respectively. Unamortized premiums on these loans totaled $118,000 and $154,000 as of September 30, 2024 and December 31, 2023, respectively, and are amortized into interest income over the life of the loans. The Company, through the community bank, has purchased participation loans with remaining balances totaling $26.2 million and $53.5 million as of September 30, 2024 and December 31, 2023, respectively. These loans are included in the applicable loan category depending upon the collateral and purpose of the individual loan and underwritten to the Bank's credit standards. The Company, through the community bank, purchased loans from CCBX partners, at par, through agreements with those CCBX partners, and those loans had a remaining balance of $64.9 million as of September 30, 2024 and $46.5 million as of December 31, 2023. As of September 30, 2024, $61.1 million is included in consumer and other loans and $3.7 million is included in commercial and industrial loans, compared to $40.2 million in consumer and other loans and $6.3 million in commercial and industrial loans as of December 31, 2023. The following is a summary of the Company’s loan portfolio segments: Commercial and industrial loans – Commercial and industrial loans are secured by business assets including inventory, receivables and machinery and equipment of businesses located generally in the Company’s primary market area and capital calls on venture and investment funds. Also included in commercial and industrial loans are $36.5 million in unsecured CCBX partner loans. Loan types include revolving lines of credit, term loans, PPP loans, and loans secured by liquid collateral such as cash deposits or marketable securities. Also included in commercial and industrial loans are loans to other financial institutions. Additionally, the Company issues letters of credit on behalf of its customers. Risk arises primarily due to the difference between expected and actual cash flows of the borrowers. In addition, the recoverability of the Company’s investment in these loans is also dependent on other factors primarily dictated by the type of collateral securing these loans. The fair value of the collateral securing these loans may fluctuate as market conditions change. In the case of loans secured by accounts receivable, the recovery of the Company’s investment is dependent upon the borrower’s ability to collect amounts due from its customers. As of September 30, 2024, $103.9 million in outstanding CCBX capital call lines are included in commercial and industrial loans compared to $87.5 million at December 31, 2023. Capital call lines are provided to venture capital firms. These loans are secured by the capital call rights and are individually underwritten to the Bank’s credit standards by our CCBX partner and the underwriting is reviewed by the Bank on every line/loan. Construction, land and land development loans – The Company originates loans for the construction of 1-4 family, multifamily, and Commercial Real Estate (“CRE”) properties in the Company’s market area. Construction loans are considered to have higher risks due to construction completion and timing risk, the ultimate repayment being sensitive to interest rate changes, government regulation of real property and the availability of long-term financing. Additionally, economic conditions may impact the Company’s ability to recover its investment in construction loans, as adverse economic conditions may negatively impact the real estate market, which could affect the borrower’s ability to complete and sell the project. Additionally, the fair value of the underlying collateral may fluctuate as market conditions change. The Company occasionally originates land loans for the purpose of facilitating the ultimate construction of a home or commercial building. The primary risks include the borrower’s ability to pay and the inability of the Company to recover its investment due to a material decline in the fair value of the underlying collateral. Residential real estate loans – Residential real estate includes various types of loans for which the Company holds real property as collateral. Included in this segment are first and second lien single family loans, occasionally purchased by the Company to diversify its loan portfolio, and rental portfolios secured by one-to-four family homes. The primary risks of residential real estate loans include the borrower’s inability to pay, material decreases in the value of the collateral, and significant increases in interest rates which may make the loan unprofitable. As of September 30, 2024, $265.4 million in loans originated through CCBX partners are included in residential real estate loans, compared to $238.0 million at December 31, 2023. These home equity lines of credit are secured by residential real estate and are accessed by using a credit card. Home equity lines of credit are classified as residential real estate per regulatory guidelines. Commercial real estate (includes owner occupied and nonowner occupied) loans – Commercial real estate loans include various types of loans for which the Company holds real property as collateral. We have commercial mortgage loans totaling $388.7 million that are collateralized by owner-occupied real-estate and $574.2 million that are collateralized by non-owner-occupied real estate, as well as $389.0 million of multi-family residential loans and $10.7 million of farmland loans, as of September 30, 2024. The primary risks of commercial real estate loans include the borrower’s inability to pay, material decreases in the value of the collateralized real estate and significant increases in interest rates, which may make the real estate loan unprofitable. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. Consumer and other loans – The community bank originates a limited number of consumer loans, generally for banking customers only, which consist primarily of lines of credit, saving account secured loans, and auto loans. CCBX originates consumer loans including credit cards, consumer term loans and secured and unsecured lines of credit. This loan category includes overdrafts. Repayment of these loans is dependent on the borrower’s ability to pay and the fair value of the underlying collateral, if any. As of September 30, 2024, $1.12 billion in CCBX loans are included in consumer and other loans compared to $816.4 million at December 31, 2023. Not included in this category is $265.4 million and $238.0 million as of September 30, 2024 and December 31, 2023, respectively, in home equity lines of credit that are secured by residential real estate and are accessed by using a credit card. These credit card accessed home equity lines of credit are classified as residential real estate per regulatory guidelines. Past Due and Nonaccrual Loans The following table illustrates an age analysis of past due loans as of the dates indicated:
| 30-89 Days Past Due |  | 90 Days or More Past Due |  | Total Past Due |  | Current |  | Total Loans |  | 90 Days or More Past Due and Still Accruing
| (dollars in thousands; unaudited)
September 30, 2024 |  |  |  |  |  |  |  |  |  |  |
Community Bank |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial loans | $ | 271 |  |  | $ | — |  |  | $ | 271 |  |  | $ | 151,890 |  |  | $ | 152,161 |  |  | $ | — |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | — |  |  | — |  |  | — |  |  | 163,051 |  |  | 163,051 |  |  | — |
Residential real estate | — |  |  | 45 |  |  | 45 |  |  | 212,422 |  |  | 212,467 |  |  | — |
Commercial real estate | — |  |  | 831 |  |  | 831 |  |  | 1,361,621 |  |  | 1,362,452 |  |  | — |
Consumer and other loans | 2 |  |  | — |  |  | 2 |  |  | 14,171 |  |  | 14,173 |  |  | — |
Total community bank | $ | 273 |  |  | $ | 876 |  |  | $ | 1,149 |  |  | $ | 1,903,155 |  |  | $ | 1,904,304 |  |  | $ | — |
CCBX |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial loans: |  |  |  |  |  |  |  |  |  |
Capital call lines | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 103,924 |  |  | $ | 103,924 |  |  | $ | — |
All other commercial & industrial loans | 2,496 |  |  | 1,593 |  |  | 4,089 |  |  | 32,405 |  |  | 36,494 |  |  | 1,566 |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |
Residential real estate loans | 3,648 |  |  | 3,025 |  |  | 6,673 |  |  | $ | 258,729 |  |  | $ | 265,402 |  |  | 3,025 |
Consumer and other loans: |  |  |  |  |  |  |  |  |  |  |
Credit cards | 30,476 |  |  | 37,269 |  |  | 67,745 |  |  | $ | 565,946 |  |  | $ | 633,691 |  |  | 34,562 |
Other consumer and other loans | 21,534 |  |  | 6,412 |  |  | 27,946 |  |  | 454,282 |  |  | 482,228 |  |  | 6,111 |
Total CCBX | $ | 58,154 |  |  | $ | 48,299 |  |  | $ | 106,453 |  |  | $ | 1,415,286 |  |  | $ | 1,521,739 |  |  | $ | 45,264 |
Total Consolidated | $ | 58,427 |  |  | $ | 49,175 |  |  | $ | 107,602 |  |  | $ | 3,318,441 |  |  | 3,426,043 |  |  | $ | 45,264 |
Less net deferred origination fees and premiums |  |  |  |  |  |  |  |  | (7,211) |  |  |
Loans receivable |  |  |  |  |  |  |  |  | $ | 3,418,832 |  |  |
| 30-89 Days Past Due |  | 90 Days or More Past Due |  | Total Past Due |  | Current |  | Total Loans |  | 90 Days or More Past Due and Still Accruing
| (dollars in thousands; unaudited)
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |
Community Bank |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial loans | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 149,502 |  |  | $ | 149,502 |  |  | $ | — |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | — |  |  | — |  |  | — |  |  | 157,100 |  |  | 157,100 |  |  | — |
Residential real estate | 44 |  |  | — |  |  | 44 |  |  | 225,347 |  |  | 225,391 |  |  | — |
Commercial real estate | — |  |  | 7,145 |  |  | 7,145 |  |  | 1,296,388 |  |  | 1,303,533 |  |  | — |
Consumer and other loans | 2 |  |  | — |  |  | 2 |  |  | 1,626 |  |  | 1,628 |  |  | — |
Total community bank | $ | 46 |  |  | $ | 7,145 |  |  | $ | 7,191 |  |  | $ | 1,829,963 |  |  | $ | 1,837,154 |  |  | $ | — |
CCBX |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial loans: |  |  |  |  |  |  |  |  |  |
Capital call lines | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 87,494 |  |  | $ | 87,494 |  |  | $ | — |
All other commercial & industrial loans | 3,433 |  |  | 2,086 |  |  | 5,519 |  |  | 48,779 |  |  | 54,298 |  |  | 2,086 |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |
Residential real estate loans | 3,198 |  |  | 1,115 |  |  | 4,313 |  |  | $ | 233,722 |  |  | $ | 238,035 |  |  | $ | 1,115 |
Consumer and other loans: |  |  |  |  |  |  |  |  |  |  |
Credit cards | 28,383 |  |  | 34,835 |  |  | 63,218 |  |  | $ | 442,619 |  |  | $ | 505,837 |  |  | $ | 34,835 |
Other consumer and other loans | 29,645 |  |  | 8,488 |  |  | 38,133 |  |  | $ | 272,441 |  |  | $ | 310,574 |  |  | $ | 8,488 |
Total CCBX | 64,659 |  |  | 46,524 |  |  | 111,183 |  |  | 1,085,055 |  |  | 1,196,238 |  |  | 46,524 |
Total Consolidated | 64,705 |  |  | 53,669 |  |  | 118,374 |  |  | 2,915,018 |  |  | 3,033,392 |  |  | 46,524 |
Less net deferred origination fees and premiums |  |  |  |  |  |  |  |  | (7,300) |  |  |
Loans receivable |  |  |  |  |  |  |  |  | $ | 3,026,092 |  |  |
There were $45.3 million in CCBX loans past due 90 days or more and still accruing interest as of September 30, 2024, and $46.5 million as of December 31, 2023. This is attributed to loans originated through CCBX lending partners which continue to accrue interest up to 180 days past due. As of September 30, 2024 and December 31, 2023, $44.0 million and $44.3 million, respectively of loans past due 90 days or more and still accruing interest are covered by credit enhancements provided by our CCBX partners that protect the Bank against losses. The accrual of interest on community bank loans is discontinued when, in management’s opinion, the borrower may be unable to meet payments as they become due or when they are 90 days past due as to either principal or interest, unless they are well secured and in the process of collection. Installment/closed-end, and revolving/open-end consumer loans originated through CCBX lending partners typically continue to accrue interest until 120 and 180 days past due, respectively and an allowance is recorded through provision expense for these expected losses. Some CCBX partners have instituted a collection practice that places certain loans on nonaccrual status to improve collectibility. As of September 30, 2024, $17.0 million of these nonaccrual CCBX loans were less than 90 days past due. For installment/closed-end and revolving/open-end consumer loans originated through CCBX lending partners with balances outstanding beyond 120 days and 180 days past due, respectively, principal and capitalized interest outstanding is charged off against the allowance and accrued interest outstanding is reversed against interest income. These consumer loans are reported as nonperforming/substandard, 90 days or more days past due and still accruing. When loans are placed on nonaccrual status, all accrued interest is reversed from current period earnings. Payments received on nonaccrual loans are generally applied as a reduction to the loan principal balance. If the likelihood of further loss is removed, the Company will recognize interest on a cash basis only. Loans may be returned to accruing status if the Company believes that all remaining principal and interest is fully collectible and there has been at least six months of sustained repayment performance since the loan was placed on nonaccrual. An analysis of nonaccrual loans by category consisted of the following at the periods indicated:
| September 30, |  | December 31,
| 2024 |  | 2023
| Total Nonaccrual | Nonaccrual with No ACL | Nonaccrual with ACL |  | Total Nonaccrual | Nonaccrual with No ACL
| (dollars in thousands; unaudited) |
Community Bank |
Commercial and industrial loans | $ | 198 |  | $ | — |  | $ | 198 |  |  | $ | — |  | $ | — |
Real estate loans: |  |  |  |  |  |
Residential real estate | 44 |  | 44 |  | — |  |  | 170 |  | 170 |
Commercial real estate | 831 |  | 831 |  | — |  |  | 7,145 |  | 7,145 |
Total Community Bank nonaccrual loans | $ | 1,073 |  | $ | 875 |  | $ | 198 |  |  | $ | 7,315 |  | $ | 7,315 |
CCBX |  |
Commercial and industrial loans | $ | 333 |  | $ | — |  | $ | 333 |  |  | $ | — |  | $ | — |
Consumer and other loans: |  |  |  |  |  |
Credit cards | 7,987 |  | — |  | 7,987 |  |  | — |  | — |
Consumer and other consumer loans | 11,713 |  | — |  | 11,713 |  |  | — |  | — |
Total CCBX nonaccrual loans | $ | 20,033 |  | $ | — |  | $ | 20,033 |  |  | $ | — |  | $ | — |
Total Consolidated nonaccrual loans | $ | 21,106 |  | $ | 875 |  | $ | 20,231 |  |  | $ | 7,315 |  | $ | 7,315 |
In some circumstances, the Company modifies loans in response to borrower financial difficulty, and generally provides for a temporary modification of loan repayment terms. In order for a modified loan to be considered for accrual status, the loan’s collateral coverage generally will be greater than or equal to 100% of the loan balance, the loan is current on payments, and the borrower must either prefund an interest reserve or demonstrate the ability to make payments from a verified source of cash flow for an extended period of time, usually at least six months in duration. No loans were modified for community bank borrowers experiencing financial difficulty in the three and nine months ended September 30, 2024 and 2023. The following table presents the CCBX loans at September 30, 2024 that were both experiencing financial difficulty and were modified during the twelve months prior to September 30, 2024 by class and by type of modification. The percentage of the loans that were modified to borrowers in financial distress as compared to the total CCBX loans of each class is also presented below.
| Principal Forgiveness |  |  |  | Term Extension |  | Interest Rate Reduction |  | Principal Forgiveness & Payment Delay |  |  |  |  |  | Principal Forgiveness, Payment Delay & Term Extension |  | Total |  | Total Class of Financing Receivable
| (dollars in thousands; unaudited)
CCBX |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
All other commercial & industrial loans | $ | — |  |  |  |  | $ | 1,830 |  |  | $ | — |  |  | $ | 333 |  |  |  |  |  |  | $ | — |  |  | $ | 2,163 |  |  | 5.93 | %
Consumer and other loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Credit cards | 7,991 |  |  |  |  | — |  |  | 12,119 |  |  | — |  |  |  |  |  |  | — |  |  | 20,110 |  |  | 3.17 |
Other consumer and other loans | — |  |  |  |  | 6,993 |  |  | — |  |  | 8,559 |  |  |  |  |  |  | 341 |  |  | 15,893 |  |  | 3.30 |
Total | $ | 7,991 |  |  |  |  | $ | 8,823 |  |  | $ | 12,119 |  |  | $ | 8,892 |  |  |  |  |  |  | $ | 341 |  |  | $ | 38,166 |  |  | 1.12 | %
The Company has committed to lend additional amounts totaling $328,000 to the borrowers included in the table above. The performance of loans modified is monitored to understand the effectiveness of the modification efforts. The following table presents the performance of such loans that have been modified in the last 12 months:
| 30-89 Days Past Due |  | 90 Days or More Past Due |  | Total Past Due
| (dollars in thousands; unaudited)
CCBX |  |  |  |  |
Commercial and industrial loans: |  |  |  |  |
All other commercial & industrial loans | $ | 452 |  |  | $ | 147 |  |  | $ | 599 |
Consumer and other loans: |  |  |  |  |
Credit cards | 4,684 |  |  | 6,090 |  |  | 10,774 |
Other consumer and other loans | 1,862 |  |  | 913 |  |  | 2,775 |
Total CCBX | $ | 6,998 |  |  | $ | 7,150 |  |  | $ | 14,148 |
The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the preceding 12 months ended September 30, 2024:
| Principal Forgiveness |  | Weighted Average Interest Rate Reduction |  | Weighted Average Term Extension (years)
| (dollars in thousands; unaudited)
CCBX |  |  |  |  |
Commercial and industrial loans: |  |  |  |  |
All other commercial & industrial loans | $ | 159 |  |  | — | % |  | 0.98
Consumer and other loans: |  |  |  |  |
Credit cards | 4,447 |  |  | 14.2 |  |  | n/a
Other consumer and other loans | 4,594 |  |  | — |  |  | 1.16
Total CCBX | $ | 9,200 |  |  | 14.2 | % |  | 1.13
The following table presents the total of loans that had a payment default during the preceding 12 months ended September 30, 2024 and which were modified for borrowers experiencing financial difficulty in the twelve months prior to that default.
| Principal Forgiveness |  |  |  | Term Extension |  | Interest Rate Reduction |  | Principal Forgiveness & Payment Delay |  |  |  |  |  | Principal Forgiveness, Payment Delay & Term Extension |  | Total
| (dollars in thousands; unaudited)
CCBX |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
All other commercial & industrial loans | — |  |  |  |  | $ | 1,159 |  |  | $ | — |  |  | $ | 198 |  |  |  |  |  |  | $ | — |  |  | $ | 1,357 |
Consumer and other loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Credit cards | 4,839 |  |  |  |  | — |  |  | 9,095 |  |  | — |  |  |  |  |  |  | — |  |  | 13,934 |
Other consumer and other loans | — |  |  |  |  | 4,619 |  |  | — |  |  | 4,104 |  |  |  |  |  |  | 102 |  |  | 8,825 |
Total | $ | 4,839 |  |  |  |  | $ | 5,778 |  |  | $ | 9,095 |  |  | $ | 4,302 |  |  |  |  |  |  | $ | 102 |  |  | $ | 24,116 |
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 charged-off against the allowance for credit losses. Therefore, the loan balance is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. Credit Quality and Credit Risk Federal regulations require that the Company periodically evaluate the risks inherent in its loan portfolio. In addition, the Company’s regulatory agencies have authority to identify problem loans and, if appropriate, require them to be reclassified. The Company establishes loan grades for loans at the origination of the loan. Changes to community bank loan grades are considered at the time new information about the performance of a loan becomes available, including the receipt of updated financial information from the borrower and after loan reviews. For consumer loans, the Bank follows the Federal Financial Institutions Examination Council’s Uniform Retail Credit Classification and Account Management Policy for subsequent classification in the event of payment delinquencies or default. Typically, an individual loan grade will not be changed from the prior period unless there is a specific indication of credit deterioration or improvement. Credit deterioration is evidenced by delinquency, direct communications with the borrower or other borrower information that becomes known to management. Credit improvements are evidenced by known facts regarding the borrower or the collateral property. The Company classifies some loans as Watch or Other Loans Especially Mentioned (“OLEM”). Loans classified as Watch are performing assets but have elements of risk that require more monitoring than other performing loans and are reported in the OLEM column in the following table. Loans classified as OLEM are assets that continue to perform but have shown deterioration in credit quality and require close monitoring. There are three classifications for problem loans: Substandard, Doubtful, and Loss. Substandard loans have one or more defined weaknesses and are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Revolving (open-ended loans, such as credit cards) and installment (closed end) consumer loans originated through CCBX partners typically continue to accrue interest until they are charged-off at 120 days past due for installment loans (primarily unsecured loans to consumers) and 180 days past due for revolving loans (primarily credit cards) and are classified as substandard once they are 90 days past due. CCBX partners may place certain loans on nonaccrual status prior to achieving these past due timelines. Doubtful loans have the weaknesses of loans classified as Substandard, with additional characteristics that suggest the weaknesses make collection or recovery in full after liquidation of collateral questionable on the basis of currently existing facts, conditions, and values. There is a high possibility of loss in loans classified as Doubtful. A loan classified as Loss is considered uncollectible and of such little value that continued classification of the credit as a loan is not warranted. If a loan or a portion thereof is classified as Loss, it must be charged-off, meaning the amount of the loss is charged against the allowance for credit losses, thereby reducing that reserve. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal of loan constitutes a current period origination. The following tables show the risk category of community bank loans by year of origination for the periods indicated, based on the most recent analysis performed as of each period end:
| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |
Community Bank | 2024 | 2023 | 2022 | 2021 | 2020 | Prior | Revolving Loans Amortized Cost Basis |  | Revolving Loans Converted To Term |  | Total
| (dollars in thousands; unaudited)
As of September 30, 2024 |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial loans |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 7,450 |  | $ | 12,757 |  | $ | 44,470 |  | $ | 13,751 |  | $ | 8,652 |  | $ | 8,202 |  | $ | 52,199 |  |  | $ | 1,172 |  |  | $ | 148,653 |
Other Loan Especially Mentioned | — |  | — |  | — |  | — |  | — |  | — |  | 3,310 |  |  | — |  |  | 3,310 |
Substandard | — |  | — |  | — |  | — |  | — |  | — |  | 198 |  |  | — |  |  | 198 |
Doubtful | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Total commercial and industrial loans - All other commercial and industrial loans | $ | 7,450 |  | $ | 12,757 |  | $ | 44,470 |  | $ | 13,751 |  | $ | 8,652 |  | $ | 8,202 |  | $ | 55,707 |  |  | $ | 1,172 |  |  | $ | 152,161 |
Current period gross charge-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 167 |  | $ | — |  |  | $ | — |  |  | $ | 167 |
Real estate loans - Construction, land and land development loans |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 23,117 |  | $ | 89,408 |  | $ | 34,624 |  | $ | 11,612 |  | $ | 761 |  | $ | 2,198 |  | $ | 904 |  |  | $ | — |  |  | $ | 162,624 |
Other Loan Especially Mentioned | — |  | — |  | — |  | 427 |  | — |  | — |  | — |  |  | — |  |  | 427 |
Substandard | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Doubtful | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Total real estate loans - Construction, land and land development loans | $ | 23,117 |  | $ | 89,408 |  | $ | 34,624 |  | $ | 12,039 |  | $ | 761 |  | $ | 2,198 |  | $ | 904 |  |  | $ | — |  |  | $ | 163,051 |
Current period gross charge-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  |  | $ | — |  |  | $ | — |
| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |
Community Bank | 2024 | 2023 | 2022 | 2021 | 2020 | Prior | Revolving Loans Amortized Cost Basis |  | Revolving Loans Converted To Term |  | Total
| (dollars in thousands; unaudited)
As of September 30, 2024 |  |  |  |  |  |  |  |  |  |  |
Real estate loans - Residential real estate loans |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 12,465 |  | $ | 31,201 |  | $ | 38,282 |  | $ | 38,310 |  | $ | 28,733 |  | $ | 33,412 |  | $ | 26,524 |  |  | $ | 16 |  |  | $ | 208,943 |
Other Loan Especially Mentioned | — |  | — |  | 1,087 |  | — |  | 11 |  | — |  | 100 |  |  | — |  |  | 1,198 |
Substandard | 2,281 |  | — |  | — |  | — |  | — |  | — |  | 45 |  |  | — |  |  | 2,326 |
Doubtful | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Total real estate loans - Residential real estate loans | $ | 14,746 |  | $ | 31,201 |  | $ | 39,369 |  | $ | 38,310 |  | $ | 28,744 |  | $ | 33,412 |  | $ | 26,669 |  |  | $ | 16 |  |  | $ | 212,467 |
Current period gross charge-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  |  | $ | — |  |  | $ | — |
Real estate loans - Commercial real estate loans |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 84,096 |  | $ | 275,685 |  | $ | 286,086 |  | $ | 224,753 |  | $ | 132,924 |  | $ | 321,016 |  | $ | 8,548 |  |  | $ | 1,672 |  |  | $ | 1,334,780 |
Other Loan Especially Mentioned | 14,449 |  | — |  | 3,205 |  | 5,409 |  | 160 |  | 3,618 |  | — |  |  | — |  |  | 26,841 |
Substandard | — |  | — |  | — |  | — |  | 831 |  | — |  | — |  |  | — |  |  | 831 |
Doubtful | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Total real estate loans - Commercial real estate loans | $ | 98,545 |  | $ | 275,685 |  | $ | 289,291 |  | $ | 230,162 |  | $ | 133,915 |  | $ | 324,634 |  | $ | 8,548 |  |  | $ | 1,672 |  |  | $ | 1,362,452 |
Current period gross charge-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 223 |  | $ | — |  |  | $ | — |  |  | $ | 223 |
| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |
Community Bank | 2024 | 2023 | 2022 | 2021 | 2020 | Prior | Revolving Loans Amortized Cost Basis |  | Revolving Loans Converted To Term |  | Total
| (dollars in thousands; unaudited)
As of September 30, 2024 |  |  |  |  |  |  |  |  |  |  |
Consumer and other loans - Other consumer and other loans |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 252 |  | $ | 57 |  | $ | 9,076 |  | $ | 3 |  | $ | 657 |  | $ | 3,930 |  | $ | 198 |  |  | $ | — |  |  | $ | 14,173 |
Other Loan Especially Mentioned | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Substandard | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Doubtful | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Total consumer and other loans - Other consumer and other loans | $ | 252 |  | $ | 57 |  | $ | 9,076 |  | $ | 3 |  | $ | 657 |  | $ | 3,930 |  | $ | 198 |  |  | $ | — |  |  | $ | 14,173 |
Current period gross charge-offs | $ | 25 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  |  | $ | — |  |  | $ | 25 |
Total community bank loans receivable |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 127,380 |  | $ | 409,108 |  | $ | 412,538 |  | $ | 288,429 |  | $ | 171,727 |  | $ | 368,758 |  | $ | 88,373 |  |  | $ | 2,860 |  |  | $ | 1,869,173 |
Other Loan Especially Mentioned | 14,449 |  | — |  | 4,292 |  | 5,836 |  | 171 |  | 3,618 |  | 3,410 |  |  | — |  |  | 31,776 |
Substandard | 2,281 |  | — |  | — |  | — |  | 831 |  | — |  | 243 |  |  | — |  |  | 3,355 |
Doubtful | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Total community bank loans | $ | 144,110 |  | $ | 409,108 |  | $ | 416,830 |  | $ | 294,265 |  | $ | 172,729 |  | $ | 372,376 |  | $ | 92,026 |  |  | $ | 2,860 |  |  | $ | 1,904,304 |
Current period gross charge-offs | $ | 25 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 390 |  | $ | — |  |  | $ | — |  |  | $ | 415 |
| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |
Community Bank | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Loans Amortized Cost Basis |  | Revolving Loans Converted To Term |  | Total
| (dollars in thousands; unaudited)
As of December 31, 2023 |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial loans |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 15,882 |  | $ | 56,428 |  | $ | 15,566 |  | $ | 10,044 |  | $ | 12,429 |  | $ | 1,442 |  | $ | 33,412 |  |  | $ | 1,020 |  |  | $ | 146,223 |
Other Loan Especially Mentioned | — |  | — |  | — |  | 111 |  | — |  | — |  | 3,168 |  |  | — |  |  | 3,279 |
Substandard | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Doubtful | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Total commercial and industrial loans - All other commercial and industrial loans | $ | 15,882 |  | $ | 56,428 |  | $ | 15,566 |  | $ | 10,155 |  | $ | 12,429 |  | $ | 1,442 |  | $ | 36,580 |  |  | $ | 1,020 |  |  | $ | 149,502 |
Current period gross charge-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 46 |  | $ | — |  |  | $ | — |  |  | $ | 46 |
Real estate loans - Construction, land and land development loans |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 75,129 |  | $ | 49,275 |  | $ | 20,811 |  | $ | 2,859 |  | $ | 914 |  | $ | 1,598 |  | $ | — |  |  | $ | — |  |  | $ | 150,586 |
Other Loan Especially Mentioned | — |  | — |  | 3,589 |  | 2,325 |  | — |  | — |  | — |  |  | — |  |  | 5,914 |
Substandard | — |  | — |  | — |  | — |  | — |  | — |  | 600 |  |  | — |  |  | 600 |
Doubtful | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Total real estate loans - Construction, land and land development loans | $ | 75,129 |  | $ | 49,275 |  | $ | 24,400 |  | $ | 5,184 |  | $ | 914 |  | $ | 1,598 |  | $ | 600 |  |  | $ | — |  |  | $ | 157,100 |
Current period gross charge-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  |  | $ | — |  |  | $ | — |
| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |
Community Bank | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Loans Amortized Cost Basis |  | Revolving Loans Converted To Term |  | Total
| (dollars in thousands; unaudited)
As of December 31, 2023 |  |  |  |  |  |  |  |  |  |  |
Real estate loans - Residential real estate loans |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 32,352 |  | $ | 41,362 |  | $ | 39,137 |  | $ | 30,259 |  | $ | 31,982 |  | $ | 22,429 |  | $ | 24,396 |  |  | $ | 18 |  |  | $ | 221,935 |
Other Loan Especially Mentioned | — |  | 1,098 |  | 2,020 |  | 28 |  | — |  | 40 |  | 100 |  |  | — |  |  | 3,286 |
Substandard | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | 170 |  |  | 170 |
Doubtful | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Total real estate loans - Residential real estate loans | $ | 32,352 |  | $ | 42,460 |  | $ | 41,157 |  | $ | 30,287 |  | $ | 31,982 |  | $ | 22,469 |  | $ | 24,496 |  |  | $ | 188 |  |  | $ | 225,391 |
Current period gross charge-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  |  | $ | — |  |  | $ | — |
Real estate loans - Commercial real estate loans |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 244,169 |  | $ | 303,329 |  | $ | 222,287 |  | $ | 144,602 |  | $ | 126,437 |  | $ | 233,482 |  | $ | 7,509 |  |  | $ | 1,719 |  |  | $ | 1,283,534 |
Other Loan Especially Mentioned | — |  | 3,257 |  | 5,891 |  | 171 |  | 506 |  | 2,099 |  | 100 |  |  | — |  |  | 12,024 |
Substandard | — |  | — |  | — |  | 924 |  | 6,900 |  | — |  | 151 |  |  | — |  |  | 7,975 |
Doubtful | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Total real estate loans - Commercial real estate loans | $ | 244,169 |  | $ | 306,586 |  | $ | 228,178 |  | $ | 145,697 |  | $ | 133,843 |  | $ | 235,581 |  | $ | 7,760 |  |  | $ | 1,719 |  |  | $ | 1,303,533 |
Current period gross charge-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  |  | $ | — |  |  | $ | — |
| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |
Community Bank | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Loans Amortized Cost Basis |  | Revolving Loans Converted To Term |  | Total
| (dollars in thousands; unaudited)
As of December 31, 2023 |  |  |  |  |  |  |  |  |  |  |
Consumer and other loans - Other consumer and other loans |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 323 |  | $ | 272 |  | $ | 5 |  | $ | 679 |  | $ | 38 |  | $ | 164 |  | $ | 147 |  |  | $ | — |  |  | $ | 1,628 |
Other Loan Especially Mentioned | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Substandard | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Doubtful | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Total consumer and other loans - Other consumer and other loans | $ | 323 |  | $ | 272 |  | $ | 5 |  | $ | 679 |  | $ | 38 |  | $ | 164 |  | $ | 147 |  |  | $ | — |  |  | $ | 1,628 |
Current period gross charge-offs | $ | 18 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  |  | $ | — |  |  | $ | 18 |
Total community bank loans receivable |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 367,855 |  | $ | 450,666 |  | $ | 297,806 |  | $ | 188,443 |  | $ | 171,800 |  | $ | 259,115 |  | $ | 65,464 |  |  | $ | 2,757 |  |  | $ | 1,803,906 |
Other Loan Especially Mentioned | — |  | 4,355 |  | 11,500 |  | 2,635 |  | 506 |  | 2,139 |  | 3,368 |  |  | — |  |  | 24,503 |
Substandard | — |  | — |  | — |  | 924 |  | 6,900 |  | — |  | 751 |  |  | 170 |  |  | 8,745 |
Doubtful | — |  | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  |  | — |
Total community bank loans | $ | 367,855 |  | $ | 455,021 |  | $ | 309,306 |  | $ | 192,002 |  | $ | 179,206 |  | $ | 261,254 |  | $ | 69,583 |  |  | $ | 2,927 |  |  | $ | 1,837,154 |
Current period gross charge-offs | $ | 18 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 46 |  | $ | — |  |  | $ | — |  |  | $ | 64 |
The Company considers the performance of the CCBX loan portfolio and its impact on the allowance for credit losses. For CCBX loans, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following tables present the loans in CCBX based on payment activity for the periods indicated:
| Term Loans Amortized Cost Basis by Origination Year |  |  |
CCBX | 2024 | 2023 | 2022 | 2021 | 2020 | Prior | Revolving Loans Amortized Cost Basis | Revolving Loans Converted To Term | Total
| (dollars in thousands; unaudited)
As of September 30, 2024 |  |  |  |  |  |  |  |  |
Commercial and industrial loans - Capital call lines |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |
Performing | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 103,924 |  | $ | — |  | $ | 103,924 |
Nonperforming | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total commercial and industrial loans - Capital call lines | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 103,924 |  | $ | — |  | $ | 103,924 |
Current period gross charge-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Commercial and industrial loans - All other commercial and industrial loans |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |
Performing | $ | — |  | $ | 26,555 |  | $ | 4,288 |  | $ | 5 |  | $ | 9 |  | $ | — |  | $ | 4,044 |  | $ | — |  | $ | 34,901 |
Nonperforming | — |  | 885 |  | 186 |  | — |  | — |  | — |  | 522 |  | — |  | 1,593 |
Total commercial and industrial loans - All other commercial and industrial loans | $ | — |  | $ | 27,440 |  | $ | 4,474 |  | $ | 5 |  | $ | 9 |  | $ | — |  | $ | 4,566 |  | $ | — |  | $ | 36,494 |
Current period gross charge-offs | $ | 285 |  | $ | 9,446 |  | $ | 1,632 |  | $ | 2 |  | $ | — |  | $ | — |  | $ | 887 |  | $ | — |  | $ | 12,252 |
Real estate loans - Residential real estate loans |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |
Performing | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 251,269 |  | $ | 11,108 |  | $ | 262,377 |
Nonperforming | — |  | — |  | — |  | — |  | — |  | — |  | 3,025 |  | — |  | 3,025 |
Total real estate loans - Residential real estate loans | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 254,294 |  | $ | 11,108 |  | $ | 265,402 |
Current period gross charge-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 3,297 |  | $ | — |  | $ | 3,297 |
| Term Loans Amortized Cost Basis by Origination Year |  |  |
CCBX | 2024 | 2023 | 2022 | 2021 | 2020 | Prior | Revolving Loans Amortized Cost Basis | Revolving Loans Converted To Term | Total
| (dollars in thousands; unaudited)
As of September 30, 2024 |  |  |  |  |  |  |  |  |
Consumer and other loans - Credit cards |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |
Performing | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 591,089 |  | $ | 53 |  | $ | 591,142 |
Nonperforming | — |  | — |  | — |  | — |  | — |  | — |  | 42,549 |  | — |  | 42,549 |
Total consumer and other loans - Credit cards | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 633,638 |  | $ | 53 |  | $ | 633,691 |
Current period gross charge-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 97,818 |  | $ | — |  | $ | 97,818 |
Consumer and other loans - Other consumer and other loans |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |
Performing | $ | 294,373 |  | $ | 129,771 |  | $ | 27,508 |  | $ | 3,282 |  | $ | 51 |  | $ | 261 |  | $ | 20,570 |  | $ | — |  | $ | 475,816 |
Nonperforming | 1,342 |  | 3,049 |  | 1,508 |  | 256 |  | — |  | 47 |  | 210 |  | — |  | 6,412 |
Total consumer and other loans - Other consumer and other loans | $ | 295,715 |  | $ | 132,820 |  | $ | 29,016 |  | $ | 3,538 |  | $ | 51 |  | $ | 308 |  | $ | 20,780 |  | $ | — |  | $ | 482,228 |
Current period gross charge-offs | $ | 5,263 |  | $ | 27,138 |  | $ | 12,353 |  | $ | 3,094 |  | $ | 24 |  | $ | 254 |  | $ | 5,598 |  | $ | — |  | $ | 53,724 |
Total CCBX loans receivable |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |
Performing | $ | 294,373 |  | $ | 156,326 |  | $ | 31,796 |  | $ | 3,287 |  | $ | 60 |  | $ | 261 |  | $ | 970,896 |  | $ | 11,161 |  | $ | 1,468,160 |
Nonperforming | 1,342 |  | 3,934 |  | 1,694 |  | 256 |  | — |  | 47 |  | 46,306 |  | — |  | 53,579 |
Total CCBX loans | $ | 295,715 |  | $ | 160,260 |  | $ | 33,490 |  | $ | 3,543 |  | $ | 60 |  | $ | 308 |  | $ | 1,017,202 |  | $ | 11,161 |  | $ | 1,521,739 |
Current period gross charge-offs | $ | 5,548 |  | $ | 36,584 |  | $ | 13,985 |  | $ | 3,096 |  | $ | 24 |  | $ | 254 |  | $ | 107,600 |  | $ | — |  | $ | 167,091 |
| Term Loans Amortized Cost Basis by Origination Year |  |  |
CCBX | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Loans Amortized Cost Basis | Revolving Loans Converted To Term | Total
| (dollars in thousands; unaudited)
As of December 31, 2023 |  |  |  |  |  |  |  |  |
Commercial and industrial loans - Capital call lines |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |
Performing | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 87,494 |  | $ | — |  | $ | 87,494 |
Nonperforming | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total commercial and industrial loans - Capital call lines | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 87,494 |  | $ | — |  | $ | 87,494 |
Current period gross charge-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Commercial and industrial loans - All other commercial and industrial loans |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |
Performing | $ | 42,267 |  | $ | 6,835 |  | $ | 9 |  | $ | 11 |  | $ | — |  | $ | — |  | $ | 3,090 |  | $ | — |  | $ | 52,212 |
Nonperforming | 1,333 |  | 277 |  | — |  | — |  | — |  | — |  | 476 |  | — |  | 2,086 |
Total commercial and industrial loans - All other commercial and industrial loans | $ | 43,600 |  | $ | 7,112 |  | $ | 9 |  | $ | 11 |  | $ | — |  | $ | — |  | $ | 3,566 |  | $ | — |  | $ | 54,298 |
Current period gross charge-offs | $ | 3,848 |  | $ | 2,502 |  | $ | 15 |  | $ | 16 |  | $ | — |  | $ | — |  | $ | 224 |  | $ | — |  | $ | 6,605 |
Real estate loans - Residential real estate loans |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |
Performing | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 212,435 |  | $ | 24,485 |  | $ | 236,920 |
Nonperforming | — |  | — |  | — |  | — |  | — |  | — |  | 1,115 |  | — |  | 1,115 |
Total real estate loans - Residential real estate loans | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 213,550 |  | $ | 24,485 |  | $ | 238,035 |
Current period gross charge-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 4,641 |  | $ | — |  | $ | 4,641 |
| Term Loans Amortized Cost Basis by Origination Year |  |  |
CCBX | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Loans Amortized Cost Basis | Revolving Loans Converted To Term | Total
| (dollars in thousands; unaudited)
As of December 31, 2023 |  |  |  |  |  |  |  |  |
Consumer and other loans - Credit cards |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |
Performing | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 469,049 |  | $ | 1,953 |  | $ | 471,002 |
Nonperforming | — |  | — |  | — |  | — |  | — |  | — |  | 33,655 |  | 1,180 |  | 34,835 |
Total consumer and other loans - Credit cards | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 502,704 |  | $ | 3,133 |  | $ | 505,837 |
Current period gross charge-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 61,358 |  | $ | — |  | $ | 61,358 |
Consumer and other loans - Other consumer and other loans |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |
Performing | $ | 216,024 |  | $ | 50,732 |  | $ | 6,888 |  | $ | 98 |  | $ | 418 |  | $ | 317 |  | $ | 27,609 |  | $ | — |  | $ | 302,086 |
Nonperforming | 4,229 |  | 3,074 |  | 477 |  | — |  | 7 |  | 10 |  | 691 |  | — |  | 8,488 |
Total consumer and other loans - Other consumer and other loans | $ | 220,253 |  | $ | 53,806 |  | $ | 7,365 |  | $ | 98 |  | $ | 425 |  | $ | 327 |  | $ | 28,300 |  | $ | — |  | $ | 310,574 |
Current period gross charge-offs | $ | 17,815 |  | $ | 43,115 |  | $ | 11,574 |  | $ | 84 |  | $ | 346 |  | $ | 217 |  | $ | 6,178 |  | $ | — |  | $ | 79,329 |
Total CCBX loans receivable |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |
Performing | $ | 258,291 |  | $ | 57,567 |  | $ | 6,897 |  | $ | 109 |  | $ | 418 |  | $ | 317 |  | $ | 799,677 |  | $ | 26,438 |  | $ | 1,149,714 |
Nonperforming | 5,562 |  | 3,351 |  | 477 |  | — |  | 7 |  | 10 |  | 35,937 |  | 1,180 |  | 46,524 |
Total CCBX loans | $ | 263,853 |  | $ | 60,918 |  | $ | 7,374 |  | $ | 109 |  | $ | 425 |  | $ | 327 |  | $ | 835,614 |  | $ | 27,618 |  | $ | 1,196,238 |
Current period gross charge-offs | $ | 21,663 |  | $ | 45,617 |  | $ | 11,589 |  | $ | 100 |  | $ | 346 |  | $ | 217 |  | $ | 72,401 |  | $ | — |  | $ | 151,933 |
Allowance for Credit Losses ("ACL") CCBX loans have a higher level of expected losses than our community bank loans, which is reflected in the factors for the allowance for credit losses. Agreements with our CCBX partners provide for a credit enhancement which protects the Bank by reimbursing most losses. In accordance with accounting guidance, we estimate and record a provision for expected losses for these CCBX loans and reclassified negative deposit accounts. When the provision for CCBX credit losses and provision for unfunded commitments are recorded, a credit enhancement asset is also recorded on the balance sheet through noninterest income (BaaS credit enhancements). Expected losses are recorded in the allowance for credit losses. The credit enhancement asset is reduced when credit enhancement payments are received from the CCBX partner or taken from the partner's cash reserve account. CCBX partners provide for credit enhancements that provide protection to the Bank from credit and fraud losses by reimbursing the Bank for the losses. If the partner is unable to fulfill their contracted obligations then the Bank could be exposed to the loss of the reimbursement and credit enhancement income. In accordance with the program agreement for one CCBX partner, the Company was responsible for credit losses on approximately 5% of a $400.8 million portfolio, or $19.8 million in loans that are without credit enhancement reimbursements as of September 30, 2024. Prior to April 1, 2024, the Company was responsible for 10% of the credit losses on this portfolio. The following tables summarize the allocation of the ACL, as well as the activity in the ACL attributed to various segments in the loan portfolio, as of and for the three and nine months ended September 30, 2024 and for the three and nine months ended September 30, 2023:
| Commercial and Industrial |  | Construction, Land, and Land Development |  | Residential Real Estate |  | Commercial Real Estate |  | Consumer and Other |  | Unallocated |  | Total
| (dollars in thousands; unaudited)
Three Months Ended September 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |
ACL balance, June 30, 2024 | $ | 12,103 |  |  | $ | 6,110 |  |  | $ | 15,532 |  |  | $ | 7,319 |  |  | $ | 106,850 |  |  | $ | — |  |  | $ | 147,914 |
Provision for credit losses or (recapture) | 1,804 |  |  | (2,558) |  |  | (1,580) |  |  | 1,994 |  |  | 71,925 |  |  | — |  |  | 71,585 |
| 13,907 |  |  | 3,552 |  |  | 13,952 |  |  | 9,313 |  |  | 178,775 |  |  | — |  |  | 219,499 |
Loans charged-off | (3,852) |  |  | — |  |  | (1,290) |  |  | (223) |  |  | (47,940) |  |  | — |  |  | (53,305) |
Recoveries of loans previously charged-off | 390 |  |  | — |  |  | 3 |  |  | — |  |  | 3,676 |  |  | — |  |  | 4,069 |
Net charge-offs | (3,462) |  |  | — |  |  | (1,287) |  |  | (223) |  |  | (44,264) |  |  | — |  |  | (49,236) |
ACL balance, September 30, 2024 | $ | 10,445 |  |  | $ | 3,552 |  |  | $ | 12,665 |  |  | $ | 9,090 |  |  | $ | 134,511 |  |  | $ | — |  |  | $ | 170,263 |
Nine Months Ended September 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |
ALLL balance, December 31, 2023 | $ | 8,877 |  |  | $ | 6,386 |  |  | $ | 13,049 |  |  | $ | 7,441 |  |  | $ | 81,205 |  |  | $ | — |  |  | $ | 116,958 |
Provision for credit losses or (recapture) | 13,183 |  |  | (2,834) |  |  | 2,906 |  |  | 1,872 |  |  | 197,866 |  |  | — |  |  | 212,993 |
| 22,060 |  |  | 3,552 |  |  | 15,955 |  |  | 9,313 |  |  | 279,071 |  |  | — |  |  | 329,951 |
Loans charged-off | (12,419) |  |  | — |  |  | (3,297) |  |  | (223) |  |  | (151,567) |  |  | — |  |  | (167,506) |
Recoveries of loans previously charged-off | 804 |  |  | — |  |  | 7 |  |  | — |  |  | 7,007 |  |  | — |  |  | 7,818 |
Net charge-offs | (11,615) |  |  | — |  |  | (3,290) |  |  | (223) |  |  | (144,560) |  |  | — |  |  | (159,688) |
ACL balance, September 30, 2024 | $ | 10,445 |  |  | $ | 3,552 |  |  | $ | 12,665 |  |  | $ | 9,090 |  |  | $ | 134,511 |  |  | $ | — |  |  | $ | 170,263 |
Three Months Ended September 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |
ACL balance, June 30, 2023 | $ | 9,551 |  |  | $ | 6,539 |  |  | $ | 8,849 |  |  | $ | 6,952 |  |  | $ | 78,871 |  |  | $ | — |  |  | $ | 110,762 |
Provision for credit losses or (recapture) | 2,771 |  |  | 132 |  |  | 3,517 |  |  | 456 |  |  | 20,281 |  |  | — |  |  | 27,157 |
| 12,322 |  |  | 6,671 |  |  | 12,366 |  |  | 7,408 |  |  | 99,152 |  |  | — |  |  | 137,919 |
Loans charged-off | (2,328) |  |  | — |  |  | (1,476) |  |  | — |  |  | (34,075) |  |  | — |  |  | (37,879) |
Recoveries of loans previously charged-off | 1 |  |  | — |  |  | 2 |  |  | — |  |  | 1,042 |  |  | — |  |  | 1,045 |
Net (charge-offs) recoveries | (2,327) |  |  | — |  |  | (1,474) |  |  | — |  |  | (33,033) |  |  | — |  |  | (36,834) |
ACL Balance, September 30, 2023 | $ | 9,995 |  |  | $ | 6,671 |  |  | $ | 10,892 |  |  | $ | 7,408 |  |  | $ | 66,119 |  |  | $ | — |  |  | $ | 101,085 |
Nine Months Ended September 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |
ACL Balance, December 31, 2022 | $ | 4,831 |  |  | $ | 7,425 |  |  | $ | 4,142 |  |  | $ | 5,470 |  |  | $ | 50,996 |  |  | $ | 1,165 |  |  | $ | 74,029 |
Impact of adopting CECL (ASC 326) | 1,428 |  |  | (1,589) |  |  | 1,623 |  |  | 1,240 |  |  | 2,315 |  |  | (1,165) |  |  | 3,852 |
Provision for credit losses or (recapture) | 7,247 |  |  | 835 |  |  | 8,283 |  |  | 698 |  |  | 106,236 |  |  | — |  |  | 123,299 |
| 13,506 |  |  | 6,671 |  |  | 14,048 |  |  | 7,408 |  |  | 159,547 |  |  | — |  |  | 201,180 |
Loans charged-off | (3,515) |  |  | — |  |  | (3,158) |  |  | — |  |  | (97,672) |  |  | — |  |  | (104,345) |
Recoveries of loans previously charged-off | 4 |  |  | — |  |  | 2 |  |  | — |  |  | 4,244 |  |  | — |  |  | 4,250 |
Net charge-offs | (3,511) |  |  | — |  |  | (3,156) |  |  | — |  |  | (93,428) |  |  | — |  |  | (100,095) |
ALLL Balance, September 30, 2023 | $ | 9,995 |  |  | $ | 6,671 |  |  | $ | 10,892 |  |  | $ | 7,408 |  |  | $ | 66,119 |  |  | $ | — |  |  | $ | 101,085 |
There was a recapture of unfunded commitments of $1.3 million and a provision of $2.7 million respectively, for the three and nine months ended September 30, 2024. There was a provision for unfunded commitments of $96,000 and a recapture $96,000 respectively, for the three and nine months ended September 30, 2023. The following table presents the collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans as of the dates indicated:
| Real Estate |  | Business Assets |  | Total |  | ACL
| (dollars in thousands; unaudited)
September 30, 2024 |  |  |  |  |  |  |
Commercial and industrial loans | $ | — |  |  | $ | 198 |  |  | $ | 198 |  |  | $ | 140 |
Real estate loans: |  |  |  |  |  |  |
Residential real estate | $ | 44 |  |  | $ | — |  |  | $ | 44 |  |  | $ | — |
Commercial real estate | 831 |  |  | — |  |  | 831 |  |  | — |
Total | $ | 875 |  |  | $ | 198 |  |  | $ | 1,073 |  |  | $ | 140 |
| Real Estate |  |  |  | Total |  | ACL
| (dollars in thousands; unaudited)
December 31, 2023 |  |  |  |  |  |  |
Real estate loans: |  |  |  |  |  |  |
Residential real estate | $ | 170 |  |  |  |  | $ | 170 |  |  | $ | — |
Commercial real estate | 7,145 |  |  |  |  | 7,145 |  |  | — |
Total | $ | 7,315 |  |  |  |  | $ | 7,315 |  |  | $ | — |

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