XML 25 R16.htm IDEA: XBRL DOCUMENT

Allowance for Credit Losses

6 Months Ended

Jun. 30, 2023

Note 6 Allowance for Credit Losses

The tables below detail the Company’s allowance for credit losses as of the dates shown:


	Three months ended June 30, 2023
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	37,395	$	32,890	$	19,574	$	484	$	90,343
Charge-offs		(3)		—		(46)		(305)		(354)
Recoveries		5		1		5		31		42
Provision expense (release) for credit losses		4,661		(2,123)		(202)		214		2,550
Ending balance	$	42,058	$	30,768	$	19,331	$	424	$	92,581


	Six months ended June 30, 2023
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	37,608	$	32,050	$	19,306	$	589	$	89,553
Charge-offs		(3)		—		(46)		(630)		(679)
Recoveries		45		2		12		48		107
Provision expense (release) for credit losses		4,408		(1,284)		59		417		3,600
Ending balance	$	42,058	$	30,768	$	19,331	$	424	$	92,581


	Three months ended June 30, 2022
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	31,845	$	8,495	$	8,136	$	334	$	48,810
Charge-offs		(291)		—		—		(160)		(451)
Recoveries		27		21		44		23		115
Provision expense (release) for credit losses		430		(90)		1,892		154		2,386
Ending balance	$	32,011	$	8,426	$	10,072	$	351	$	50,860


	Six months ended June 30, 2022
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	31,256	$	10,033	$	8,056	$	349	$	49,694
Charge-offs		(754)		—		(2)		(329)		(1,085)
Recoveries		74		21		46		49		190
Provision expense (release) for credit losses		1,435		(1,628)		1,972		282		2,061
Ending balance	$	32,011	$	8,426	$	10,072	$	351	$	50,860

In evaluating the loan portfolio for an appropriate ACL level, excluding loans evaluated individually, loans were grouped into segments based on broad characteristics such as primary use and underlying collateral. Within the segments, the portfolio was further disaggregated into classes of loans with similar attributes and risk characteristics for purposes of developing the underlying data used within the discounted cash flow model including, but not limited to, prepayment and recovery rates as well as loss rates tied to macro-economic conditions within management’s reasonable and supportable forecast. The ACL also includes subjective adjustments based upon qualitative risk factors including asset quality, loss trends, lending management, portfolio growth and loan review/internal audit results.

Net charge-offs on loans during the three and six months ended June 30, 2023 were $0.3 million and $0.6 million, respectively. The Company recorded an increase in the allowance for credit losses of $2.2 million during the three months ended June 30, 2023, driven

by loan growth, higher reserve requirements and an increase in specific loan reserves. During the six months ended June 30, 2023, the Company recorded an increase in the allowance for credit losses of $3.0 million, driven by loan growth and higher reserve requirements.

Net charge-offs on loans during the three and six months ended June 30, 2022 were $0.3 million and $0.9 million, respectively. The Company recorded an increase in the allowance for credit losses of $2.1 million during the three months ended June 30, 2022. During the six months ended June 30, 2022, the Company recorded an increase in the allowance for credit losses of $1.2 million, driven by loan growth.

The Company has elected to exclude AIR from the allowance for credit losses calculation. As of June 30, 2023 and December 31, 2022, AIR from loans totaled $33.4 million and $31.8 million, respectively.