XML 25 R15.htm IDEA: XBRL DOCUMENT

Loans

3 Months Ended

Mar. 31, 2024

Note 5 Loans

The loan portfolio is comprised of loans originated by the Company and loans that were acquired in connection with the Company’s acquisitions.

The tables below show the loan portfolio composition including carrying value by segment as of the dates shown. The carrying value of loans is net of discounts, fees, costs and fair value marks of $33.3 million and $33.6 million as of March 31, 2024 and December 31, 2023, respectively.


	March 31, 2024
	Total loans		% of total
Commercial	$	4,381,780	57.9%
Commercial real estate non-owner occupied		1,860,199	24.6%
Residential real estate		1,310,204	17.3%
Consumer		16,869	0.2%
Total	$	7,569,052	100.0%


	December 31, 2023
	Total loans		% of total
Commercial	$	4,499,035	58.4%
Commercial real estate non-owner occupied		1,856,750	24.1%
Residential real estate		1,323,787	17.2%
Consumer		19,186	0.3%
Total	$	7,698,758	100.0%

Information about delinquent and non-accrual loans is shown in the following tables at March 31, 2024 and December 31, 2023:


	March 31, 2024
			Greater
	30-89 days		than 90 days				Total past
	past due and		past due and		Non-accrual		due and
	accruing		accruing		loans		non-accrual		Current		Total loans
Commercial:
Commercial and industrial	$	499	$	—	$	8,817	$	9,316	$	1,900,544	$	1,909,860
Municipal and non-profit		—		—		—		—		1,062,581		1,062,581
Owner occupied commercial real estate		49		—		752		801		1,108,988		1,109,789
Food and agribusiness		—		—		5,476		5,476		294,074		299,550
Total commercial		548		—		15,045		15,593		4,366,187		4,381,780
Commercial real estate non-owner occupied:
Construction		—		—		—		—		356,564		356,564
Acquisition/development		—		—		—		—		90,323		90,323
Multifamily		—		—		—		—		347,421		347,421
Non-owner occupied		572		—		13,472		14,044		1,051,847		1,065,891
Total commercial real estate and non-owner occupied		572		—		13,472		14,044		1,846,155		1,860,199
Residential real estate:
Senior lien		735		—		6,293		7,028		1,212,617		1,219,645
Junior lien		1,439		—		957		2,396		88,163		90,559
Total residential real estate		2,174		—		7,250		9,424		1,300,780		1,310,204
Consumer		201		1		50		252		16,617		16,869
Total loans	$	3,495	$	1	$	35,817	$	39,313	$	7,529,739	$	7,569,052


	March 31, 2024
	Non-accrual loans		Non-accrual loans
	with a related		with no related
	allowance for		allowance for		Non-accrual
	credit loss		credit loss		loans
Commercial:
Commercial and industrial	$	8,756	$	61	$	8,817
Municipal and non-profit		—		—		—
Owner occupied commercial real estate		752		—		752
Food and agribusiness		4,890		586		5,476
Total commercial		14,398		647		15,045
Commercial real estate non-owner occupied:
Construction		—		—		—
Acquisition/development		—		—		—
Multifamily		—		—		—
Non-owner occupied		13,472		—		13,472
Total commercial real estate non-owner occupied		13,472		—		13,472
Residential real estate:
Senior lien		3,613		2,680		6,293
Junior lien		429		528		957
Total residential real estate		4,042		3,208		7,250
Consumer		50		—		50
Total loans	$	31,962	$	3,855	$	35,817


	December 31, 2023
			Greater
	30-89 days		than 90 days				Total past
	past due and		past due and		Non-accrual		due and
	accruing		accruing		loans		non-accrual		Current		Total loans
Commercial:
Commercial and industrial	$	9,179	$	—	$	2,250	$	11,429	$	1,955,480	$	1,966,909
Municipal and non-profit		—		—		—		—		1,083,756		1,083,756
Owner occupied commercial real estate		—		—		755		755		1,123,018		1,123,773
Food and agribusiness		—		12		5,762		5,774		318,823		324,597
Total commercial		9,179		12		8,767		17,958		4,481,077		4,499,035
Commercial real estate non-owner occupied:
Construction		—		—		—		—		405,250		405,250
Acquisition/development		1,077		—		—		1,077		99,019		100,096
Multifamily		—		—		—		—		311,770		311,770
Non-owner occupied		60		—		13,472		13,532		1,026,102		1,039,634
Total commercial real estate and non-owner occupied		1,137		—		13,472		14,609		1,842,141		1,856,750
Residential real estate:
Senior lien		1,410		50		5,488		6,948		1,226,651		1,233,599
Junior lien		375		528		448		1,351		88,837		90,188
Total residential real estate		1,785		578		5,936		8,299		1,315,488		1,323,787
Consumer		131		1		53		185		19,001		19,186
Total loans	$	12,232	$	591	$	28,228	$	41,051	$	7,657,707	$	7,698,758


	December 31, 2023
	Non-accrual loans		Non-accrual loans
	with a related		with no related
	allowance for		allowance for		Non-accrual
	credit loss		credit loss		loans
Commercial:
Commercial and industrial	$	2,250	$	—	$	2,250
Municipal and non-profit		—		—		—
Owner occupied commercial real estate		755		—		755
Food and agribusiness		5,176		586		5,762
Total commercial		8,181		586		8,767
Commercial real estate non-owner occupied:
Construction		—		—		—
Acquisition/development		—		—		—
Multifamily		—		—		—
Non-owner occupied		13,472		—		13,472
Total commercial real estate non-owner occupied		13,472		—		13,472
Residential real estate:
Senior lien		3,277		2,211		5,488
Junior lien		448		—		448
Total residential real estate		3,725		2,211		5,936
Consumer		53		—		53
Total loans	$	25,431	$	2,797	$	28,228

Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement remains unpaid after the due date of the scheduled payment. Loans to borrowers experiencing financial difficulties may be modified. Modified loans are discussed in more detail below. There was no interest income recognized from non-accrual loans during the three months ended March 31, 2024 or 2023.

The Company’s internal risk rating system uses a series of grades, which reflect our assessment of the credit quality of loans based on an analysis of the borrower's financial condition, liquidity and ability to meet contractual debt service requirements and are categorized as “Pass”, “Special mention”, “Substandard” and “Doubtful”. For a description of the general characteristics of the risk grades, refer to note 2 Summary of Significant Accounting Policies in our audited consolidated financial statements in our 2023 Annual Report on Form 10-K.

The amortized cost basis and current period gross charge offs for all loans as determined by the Company’s internal risk rating system and year of origination is shown in the following tables as of and for the three months ended March 31, 2024 and year ended December 31, 2023:


	March 31, 2024
													Revolving		Revolving
													loans		loans
	Origination year												amortized		converted
	2024		2023		2022		2021		2020		Prior		cost basis		to term		Total
Commercial:
Commercial and industrial:
Pass	$	96,569	$	335,134	$	378,386	$	269,460	$	80,650	$	141,401	$	467,602	$	11,284	$	1,780,486
Special mention		900		6,390		27,376		31,292		11,208		2,335		21,194		1,244		101,939
Substandard		—		11,703		3,367		1,347		6,950		575		808		—		24,750
Doubtful		—		2,033		—		35		617		—		—		—		2,685
Total commercial and industrial		97,469		355,260		409,129		302,134		99,425		144,311		489,604		12,528		1,909,860
Gross charge-offs: Commercial and industrial		—		—		—		—		—		24		—		—		24
Municipal and non-profit:
Pass		4,593		144,702		141,468		245,572		79,289		411,316		33,607		—		1,060,547
Special mention		—		—		—		—		2,034		—		—		—		2,034
Total municipal and non-profit		4,593		144,702		141,468		245,572		81,323		411,316		33,607		—		1,062,581
Owner occupied commercial real estate:
Pass		21,089		230,577		262,466		172,534		97,300		245,581		13,586		270		1,043,403
Special mention		—		1,664		22,879		9,698		—		25,858		299		—		60,398
Substandard		—		—		515		2,378		—		2,587		—		—		5,480
Doubtful		—		—		6		—		—		502		—		—		508
Total owner occupied commercial real estate		21,089		232,241		285,866		184,610		97,300		274,528		13,885		270		1,109,789
Food and agribusiness:
Pass		2,518		11,712		72,805		12,532		9,174		43,007		133,071		477		285,296
Special mention		—		—		—		4,482		—		3,683		—		450		8,615
Substandard		—		—		—		586		—		178		1,587		—		2,351
Doubtful		—		—		—		—		—		—		3,288		—		3,288
Total food and agribusiness		2,518		11,712		72,805		17,600		9,174		46,868		137,946		927		299,550
Total commercial		125,669		743,915		909,268		749,916		287,222		877,023		675,042		13,725		4,381,780
Gross charge-offs: Commercial		—		—		—		—		—		24		—		—		24
Commercial real estate non-owner occupied:
Construction:
Pass		1,860		61,438		141,828		41,016		66,519		—		43,158		745		356,564
Total construction		1,860		61,438		141,828		41,016		66,519		—		43,158		745		356,564
Acquisition/development:
Pass		85		10,100		38,832		20,641		2,532		9,299		3,438		4,319		89,246
Special mention		—		—		1,077		—		—		—		—		—		1,077
Total acquisition/development		85		10,100		39,909		20,641		2,532		9,299		3,438		4,319		90,323
Multifamily:
Pass		9,033		16,455		117,430		104,263		16,872		70,794		832		—		335,679
Special mention		—		—		11,742		—		—		—		—		—		11,742
Total multifamily		9,033		16,455		129,172		104,263		16,872		70,794		832		—		347,421
Non-owner occupied
Pass		4,031		109,914		274,414		161,436		90,611		353,135		5,988		299		999,828
Special mention		—		—		9,181		1,820		20,363		6,246		—		—		37,610
Substandard		—		—		—		5,207		—		20,013		—		—		25,220
Doubtful		—		—		—		—		—		3,233		—		—		3,233
Total non-owner occupied		4,031		109,914		283,595		168,463		110,974		382,627		5,988		299		1,065,891
Total commercial real estate non-owner occupied		15,009		197,907		594,504		334,383		196,897		462,720		53,416		5,363		1,860,199
Residential real estate:
Senior lien
Pass		9,135		91,141		436,360		308,130		110,679		206,637		48,761		107		1,210,950
Special mention		—		—		745		—		—		505		—		—		1,250
Substandard		—		1,537		1,582		986		415		2,863		—		—		7,383
Doubtful		—		—		29		—		33		—		—		—		62
Total senior lien		9,135		92,678		438,716		309,116		111,127		210,005		48,761		107		1,219,645
Junior lien
Pass		795		5,916		4,367		1,768		2,117		6,871		63,514		4,183		89,531
Special mention		—		—		—		—		—		27		—		—		27
Substandard		—		—		146		236		297		322		—		—		1,001
Total junior lien		795		5,916		4,513		2,004		2,414		7,220		63,514		4,183		90,559
Total residential real estate		9,930		98,594		443,229		311,120		113,541		217,225		112,275		4,290		1,310,204
Consumer
Pass		976		5,235		2,512		1,890		835		440		4,884		47		16,819
Substandard		—		—		—		—		—		47		3		—		50
Total consumer		976		5,235		2,512		1,890		835		487		4,887		47		16,869
Gross charge-offs: Consumer		198		18		3		3		—		32		—		—		254
Total loans	$	151,584	$	1,045,651	$	1,949,513	$	1,397,309	$	598,495	$	1,557,455	$	845,620	$	23,425	$	7,569,052
Gross charge-offs: Total loans		198		18		3		3		—		56		—		—		278


	December 31, 2023
													Revolving		Revolving
													loans		loans
	Origination year												amortized		converted
	2023		2022		2021		2020		2019		Prior		cost basis		to term		Total
Commercial:
Commercial and industrial:
Pass	$	348,103	$	396,618	$	271,201	$	87,234	$	41,261	$	106,711	$	563,924	$	31,620	$	1,846,672
Special mention		4,775		12,259		31,895		20,340		2,202		683		18,344		3,470		93,968
Substandard		13,729		4,555		4,248		1,314		179		347		910		—		25,282
Doubtful		600		—		—		387		—		—		—		—		987
Total commercial and industrial		367,207		413,432		307,344		109,275		43,642		107,741		583,178		35,090		1,966,909
Gross charge-offs: Commercial and industrial		—		12		215		—		47		3		—		—		277
Municipal and non-profit:
Pass		139,591		140,626		246,088		82,590		53,460		389,867		31,534		—		1,083,756
Total municipal and non-profit		139,591		140,626		246,088		82,590		53,460		389,867		31,534		—		1,083,756
Owner occupied commercial real estate:
Pass		236,897		275,644		181,472		97,523		86,761		163,997		18,281		—		1,060,575
Special mention		2,074		19,191		7,808		—		2,650		27,653		—		—		59,376
Substandard		—		515		1,732		—		687		234		—		—		3,168
Doubtful		—		6		—		—		—		648		—		—		654
Total owner occupied commercial real estate		238,971		295,356		191,012		97,523		90,098		192,532		18,281		—		1,123,773
Food and agribusiness:
Pass		16,917		69,212		14,159		15,379		10,417		34,592		149,125		51		309,852
Special mention		—		—		4,646		—		—		3,724		450		—		8,820
Substandard		—		—		586		—		—		180		1,786		—		2,552
Doubtful		—		—		—		—		—		—		3,373		—		3,373
Total food and agribusiness		16,917		69,212		19,391		15,379		10,417		38,496		154,734		51		324,597
Total commercial		762,686		918,626		763,835		304,767		197,617		728,636		787,727		35,141		4,499,035
Gross charge-offs: Commercial		—		12		215		—		47		3		—		—		277
Commercial real estate non-owner occupied:
Construction:
Pass		43,385		190,826		59,477		63,486		1,006		—		47,070		—		405,250
Total construction		43,385		190,826		59,477		63,486		1,006		—		47,070		—		405,250
Acquisition/development:
Pass		13,228		39,000		21,011		5,992		597		8,814		7,416		2,961		99,019
Special mention		—		1,077		—		—		—		—		—		—		1,077
Total acquisition/development		13,228		40,077		21,011		5,992		597		8,814		7,416		2,961		100,096
Multifamily:
Pass		16,450		113,936		92,574		16,938		39,371		31,671		830		—		311,770
Total multifamily		16,450		113,936		92,574		16,938		39,371		31,671		830		—		311,770
Non-owner occupied
Pass		116,168		241,563		172,042		91,188		124,291		236,694		6,694		—		988,640
Special mention		—		—		—		21,268		3,876		2,489		—		—		27,633
Substandard		—		—		—		—		—		19,848		—		—		19,848
Doubtful		—		—		—		280		—		3,233		—		—		3,513
Total non-owner occupied		116,168		241,563		172,042		112,736		128,167		262,264		6,694		—		1,039,634
Total commercial real estate non-owner occupied		189,231		586,402		345,104		199,152		169,141		302,749		62,010		2,961		1,856,750
Residential real estate:
Senior lien
Pass		87,608		434,963		316,080		112,582		42,752		183,890		48,462		94		1,226,431
Special mention		—		—		—		—		—		515		—		—		515
Substandard		1,555		1,119		740		415		620		2,167		—		—		6,616
Doubtful		—		—		—		—		—		37		—		—		37
Total senior lien		89,163		436,082		316,820		112,997		43,372		186,609		48,462		94		1,233,599
Gross charge-offs: Senior lien		—		—		—		—		—		48		—		—		48
Junior lien
Pass		4,920		4,464		1,712		2,947		2,270		4,729		66,441		684		88,167
Special mention		—		—		—		—		—		27		249		—		276
Substandard		263		149		236		758		—		339		—		—		1,745
Total junior lien		5,183		4,613		1,948		3,705		2,270		5,095		66,690		684		90,188
Total residential real estate		94,346		440,695		318,768		116,702		45,642		191,704		115,152		778		1,323,787
Gross charge-offs: Residential real estate		—		—		—		—		—		48		—		—		48
Consumer
Pass		5,945		3,330		2,233		997		244		410		5,947		27		19,133
Substandard		—		—		—		—		—		50		3		—		53
Total consumer		5,945		3,330		2,233		997		244		460		5,950		27		19,186
Gross charge-offs: Consumer		1,225		13		1		2		1		8		—		—		1,250
Total loans	$	1,052,208	$	1,949,053	$	1,429,940	$	621,618	$	412,644	$	1,223,549	$	970,839	$	38,907	$	7,698,758
Gross charge-offs: Total loans		1,225		25		216		2		48		59		—		—		1,575

Loans evaluated individually

We evaluate loans individually when they no longer share risk characteristics with pooled loans. These loans include loans on non-accrual status, loans in bankruptcy, and modified loans as described below. If a specific allowance is warranted based on the borrower’s overall financial condition, the specific allowance is calculated based on discounted expected cash flows using the loan’s initial contractual effective interest rate or the fair value of the collateral less selling costs for collateral-dependent loans.

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. Management individually evaluates collateral-dependent loans with an amortized cost basis of $250 thousand or more and includes collateral-dependent loans less than $250 thousand within the general allowance population. The amortized cost basis of collateral-dependent loans over $250 thousand was as follows at March 31, 2024 and December 31, 2023:


	March 31, 2024
					Total amortized
	Real property		Business assets		cost basis
Commercial
Commercial and industrial	$	2,905	$	5,882	$	8,787
Owner-occupied commercial real estate		1,872		—		1,872
Food and agribusiness		586		4,875		5,461
Total Commercial		5,363		10,757		16,120
Commercial real estate non owner-occupied
Non-owner occupied		18,770		—		18,770
Total commercial real estate non owner-occupied		18,770		—		18,770
Residential real estate
Senior lien		3,565		—		3,565
Junior lien		421		108		529
Total residential real estate		3,986		108		4,094
Total loans	$	28,119	$	10,865	$	38,984


	December 31, 2023
					Total amortized
	Real property		Business assets		cost basis
Commercial
Commercial and industrial	$	1,946	$	220	$	2,166
Owner-occupied commercial real estate		1,883		—		1,883
Food and agribusiness		586		5,159		5,745
Total Commercial		4,415		5,379		9,794
Commercial real estate non owner-occupied
Non-owner occupied		19,993		—		19,993
Total commercial real estate non owner-occupied		19,993		—		19,993
Residential real estate
Senior lien		2,661		—		2,661
Total residential real estate		2,661		—		2,661
Total loans	$	27,069	$	5,379	$	32,448

Loan modifications

The Company’s policy is to review each prospective credit to determine the appropriateness and the adequacy of security or collateral prior to making a loan. In the event of borrower default, the Company seeks recovery in compliance with lending laws, the respective loan agreements, and credit monitoring and remediation procedures that may include modifying a loan to provide a concession by the Company to the borrower from their original terms due to borrower financial difficulties in order to facilitate repayment. The Company considers loans to borrowers experiencing financial difficulties, where such a concession is utilized, to be troubled debt modifications (“TDM”). TDMs may include principal forgiveness, interest rate reductions, other-than-insignificant-payment delays, term extensions or any combination thereof.

The following schedules present, by loan class, the amortized costs basis as of the dates shown for modified loans to borrowers experiencing financial difficulty:


	March 31, 2024
							Combination - interest rate			Combination - term extension
	Term extension			Payment delay			reduction and term extension			and payment delay
	Amortized		% of loan	Amortized		% of loan	Amortized		% of loan	Amortized		% of loan
	cost basis		class	cost basis		class	cost basis		class	cost basis		class
Commercial:
Commercial and industrial	$	—	0.0%	$	8,561	0.4%	$	—	0.0%	$	—	0.0%
Owner occupied commercial real estate		—	0.0%		1,664	0.1%		—	0.0%		—	0.0%
Total commercial		—	0.0%		10,225	0.2%		—	0.0%		—	0.0%
Commercial real estate non-owner occupied:
Non-owner occupied		18,770	1.8%		—	0.0%		—	0.0%		—	0.0%
Total commercial real estate non-owner occupied		18,770	1.0%		—	0.0%		—	0.0%		—	0.0%
Residential real estate:
Senior lien		—	0.0%		869	0.1%		651	0.1%		382	0.0%
Total residential real estate		—	0.0%		869	0.1%		651	0.0%		382	0.0%
Total loans	$	18,770	0.2%	$	11,094	0.1%	$	651	0.0%	$	382	0.0%


	March 31, 2023

	Term extension			Payment delay
	Amortized		% of loan	Amortized		% of loan
	cost basis		class	cost basis		class
Commercial:
Commercial and industrial	$	—	0.0%	$	154	0.0%
Owner occupied commercial real estate		—	0.0%		116	0.0%
Total commercial		—	0.0%		270	0.0%
Residential real estate:
Senior lien		4,000	0.3%		—	0.0%
Total residential real estate		4,000	0.3%		—	0.0%
Total loans	$	4,000	0.1%	$	270	0.0%

The following schedules present, by loan class, the payment status of loans that have been modified in the last twelve months as of the dates presented on an amortized cost basis:


	March 31, 2024

	Current		Non-accrual
Commercial:
Commercial and industrial	$	3,129	$	5,354
Owner occupied commercial real estate		1,664		—
Total commercial		4,793		5,354
Commercial real estate non-owner occupied:
Non-owner occupied		5,298		13,472
Total commercial real estate non-owner occupied		5,298		13,472
Residential real estate:
Senior lien		651		1,251
Total loans	$	10,742	$	20,077


	March 31, 2023
	Current		Non-accrual
Commercial:
Commercial and industrial	$	154	$	—
Owner occupied commercial real estate		—		116
Total commercial		154		116
Residential real estate:
Senior lien		4,000		—
Total residential real estate		4,000		—
Total loans	$	4,154	$	116

Accrual of interest is resumed on loans that were previously on non-accrual only after the loan has performed sufficiently for a period of time. The Company had four TDMs with an amortized cost totaling $18.8 million that were modified within the past twelve months, utilizing a term extension and payment delays, that defaulted on their modified terms during the 12 months ended March 31, 2024. During the three months ended March 31, 2023, the Company had no TDMs that were modified within the preceding twelve months that defaulted on their modified terms. For purposes of this disclosure, the Company considers “default” to mean 90 days or more past due on principal or interest. The allowance for credit losses related to TDMs on non-accrual status is determined by individual evaluation, including collateral adequacy, using the same process as loans on non-accrual status which are not classified as TDMs.

The following schedules present the financial effect of the modifications made to borrowers experiencing financial difficulty as of March 31, 2024 and 2023:


	March 31, 2024
	Financial effect
		Term extension	Payment delay	Combination - Interest Rate Reduction and Term Extension	Combination - Term Extension and Payment Delay
Commercial:
Commercial and industrial			Delayed payments for a weighted average of 0.5 years
Owner occupied commercial real estate			Delayed payments for a weighted average of 0.5 years
Commercial real estate non-owner occupied:
Non-owner occupied		Extended a weighted average of 0.3 years to the life of loans, which reduced monthly payment amounts
Residential real estate:
Senior lien			Delayed payments for a weighted average of 0.3 years	Reduced weighted average contractual interest rate by 2.5% and renewed with a weighted average life of 30 years, which reduced monthly payment amounts	Added weighted average of 0.7 years to the life of loans, which reduced monthly payment amounts and delayed payments for a weighted average of 0.7 years


	March 31, 2023
	Financial effect
		Term extension	Payment delay
Commercial:
Commercial and industrial			Delayed payments for a weighted average of 0.2 years
Owner occupied commercial real estate			Delayed payments for a weighted average of 0.5 years
Residential real estate:
Senior lien		Extended a weighted average 0.5 years to the life of loans, which reduced monthly payment amounts