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Note 5 - Loans and the Allowance for Credit Losses | 9 Months Ended
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Sep. 30, 2022
Notes to Financial Statements |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 5. Loans and the Allowance for Credit Losses Loans Receivable – The following table sets forth the composition of the Company’s loan portfolio segments, including net deferred loan fees, as of September 30, 2022 and December 31, 2021:
|  | September 30, 2022 |  |  | December 31, 2021 |
|  | (dollars in thousands) |
Commercial (1) |  | $ | 1,448,727 |  |  | $ | 1,299,428 |
Commercial real estate |  |  | 5,666,848 |  |  |  | 4,741,590 |
Commercial construction |  |  | 537,323 |  |  |  | 540,178 |
Residential real estate |  |  | 256,085 |  |  |  | 255,269 |
Consumer |  |  | 1,030 |  |  |  | 1,886 |
Gross loans |  |  | 7,910,013 |  |  |  | 6,838,351 |
Net deferred loan fees |  |  | (9,563 | ) |  |  | (9,729 | )
Total loans receivable |  | $ | 7,900,450 |  |  | $ | 6,828,622 |
| (1) | Includes PPP loans of $11.5 million and $93.1 million as of September 30, 2022 and December 31, 2021 , respectively.
As of September 30, 2022 and December 31, 2021, loans totaling approximately $2.6 billion and $2.5 billion respectively, were pledged to secure borrowings from the FHLB of New York. Loans held-for-sale - The following table sets forth the composition of the Company’s loans held-for-sale as of September 30, 2022 and December 31, 2021:
|  | September 30, 2022 |  |  | December 31, 2021 |
|  | (dollars in thousands) |
Commercial real estate |  | $ | 8,080 |  |  | $ | - |
Residential real estate |  |  | - |  |  |  | 250 |
Total carrying amount |  | $ | 8,080 |  |  | $ | 250 |
Loans Receivable on Nonaccrual Status - The following tables present nonaccrual loans with an ACL and nonaccrual loans without an ACL as of September 30, 2022 and December 31, 2021:
|  | September 30, 2022 |
|  | Nonaccrual loans with ACL |  |  | Nonaccrual loans without ACL |  |  | Total nonaccrual loans |
|  | (dollars in thousands) |
Commercial |  | $ | 25,657 |  |  | $ | 1,201 |  |  | $ | 26,858 |
Commercial real estate |  |  | 21,511 |  |  |  | 6,627 |  |  |  | 28,138 |
Residential real estate |  |  | 623 |  |  |  | 1,828 |  |  |  | 2,451 |
Total |  | $ | 47,791 |  |  | $ | 9,656 |  |  | $ | 57,447 |
|  | December 31, 2021 |
|  | Nonaccrual loans with ACL |  |  | Nonaccrual loans without ACL |  |  | Total nonaccrual loans |
|  | (dollars in thousands) |
Commercial |  | $ | 28,746 |  |  | $ | 1,316 |  |  | $ | 30,062 |
Commercial real estate |  |  | 15,362 |  |  |  | 10,031 |  |  |  | 25,393 |
Commercial construction |  |  | - |  |  |  | 3,150 |  |  |  | 3,150 |
Residential real estate |  |  | 1,239 |  |  |  | 1,856 |  |  |  | 3,095 |
Total |  | $ | 45,347 |  |  | $ | 16,353 |  |  | $ | 61,700 |
Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and loans individually evaluated for impairment. Credit Quality Indicators - The Company continuously monitors the credit quality of its loans receivable. In addition to its internal monitoring, the Company utilizes the services of a third-party loan review firm to periodically validate the credit quality of its loans receivable on a sample basis. Credit quality is monitored by reviewing certain credit quality indicators. Assets classified “Pass” are deemed to possess average to superior credit quality, requiring no more than normal attention. Assets classified as “Special Mention” have generally acceptable credit quality yet possess higher risk characteristics/circumstances than satisfactory assets. Such conditions include strained liquidity, slow pay, stale financial statements, or other conditions that require more stringent attention from the lending staff. These conditions, if not corrected, may weaken the loan quality or inadequately protect the Company’s credit position at some future date. Assets are classified “Substandard” if the asset has a well-defined weakness that requires management’s attention to a greater degree than for loans classified special mention. Such weakness, if left uncorrected, could possibly result in the compromised ability of the loan to perform to contractual requirements. An asset is classified as “Doubtful” if it is inadequately protected by the net worth and/or paying capacity of the obligor or of the collateral, if any, that secures the obligation. Assets classified as doubtful include assets for which there is a “distinct possibility” that a degree of loss will occur if the inadequacies are not corrected. We evaluate whether a modification, extension or renewal of a loan is a current period origination in accordance with GAAP. Generally, loans up for renewal are subject to a full credit evaluation before the renewal is granted and such loans are considered current period originations for purpose of the table below. The following table presents loans by origination and risk designation as of September 30, 2022 (dollars in thousands):
|  | Term loans amortized cost basis by origination year |  |  |  |  |  |  |
|  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | 2018 |  |  | Prior |  |  | Revolving Loans |  |  | Total Gross Loans |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 248,673 |  |  | $ | 311,005 |  |  | $ | 50,801 |  |  | $ | 31,402 |  |  | $ | 54,872 |  |  | $ | 164,539 |  |  | $ | 532,643 |  |  | $ | 1,393,935 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 588 |  |  |  | - |  |  |  | 3,556 |  |  |  | 3,301 |  |  |  | 7,445 |
Substandard |  |  | 7,636 |  |  |  | 152 |  |  |  | 17 |  |  |  | 2,023 |  |  |  | 11,190 |  |  |  | 22,639 |  |  |  | 3,690 |  |  |  | 47,347 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Commercial |  | $ | 256,309 |  |  | $ | 311,157 |  |  | $ | 50,818 |  |  | $ | 34,013 |  |  | $ | 66,062 |  |  | $ | 190,734 |  |  | $ | 539,634 |  |  | $ | 1,448,727 |
Commercial Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,386,412 |  |  | $ | 1,617,355 |  |  | $ | 387,135 |  |  | $ | 364,220 |  |  | $ | 384,288 |  |  | $ | 1,033,994 |  |  | $ | 370,982 |  |  | $ | 5,544,386 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,317 |  |  |  | - |  |  |  | 41,841 |  |  |  | 8,883 |  |  |  | 52,041 |
Substandard |  |  | - |  |  |  | 1,939 |  |  |  | 4,500 |  |  |  | 12,517 |  |  |  | 19,314 |  |  |  | 23,984 |  |  |  | 8,167 |  |  |  | 70,421 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Commercial Real Estate |  | $ | 1,386,412 |  |  | $ | 1,619,294 |  |  | $ | 391,635 |  |  | $ | 378,054 |  |  | $ | 403,602 |  |  | $ | 1,099,819 |  |  | $ | 388,032 |  |  | $ | 5,666,848 |
Commercial Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 2,056 |  |  | $ | 7,605 |  |  | $ | 7,320 |  |  | $ | 508 |  |  | $ | - |  |  | $ | - |  |  | $ | 512,107 |  |  | $ | 529,596 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 7,727 |  |  |  | 7,727 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Commercial Construction |  | $ | 2,056 |  |  | $ | 7,605 |  |  | $ | 7,320 |  |  | $ | 508 |  |  | $ | - |  |  | $ | - |  |  | $ | 519,834 |  |  | $ | 537,323 |
Residential |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 34,852 |  |  | $ | 25,487 |  |  | $ | 25,292 |  |  | $ | 21,732 |  |  | $ | 20,493 |  |  | $ | 80,042 |  |  | $ | 41,104 |  |  | $ | 249,002 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 3,509 |  |  |  | 3,574 |  |  |  | 7,083 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Residential Real Estate |  | $ | 34,852 |  |  | $ | 25,487 |  |  | $ | 25,292 |  |  | $ | 21,732 |  |  | $ | 20,493 |  |  | $ | 83,551 |  |  | $ | 44,678 |  |  | $ | 256,085 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 903 |  |  | $ | - |  |  | $ | 10 |  |  | $ | - |  |  | $ | 5 |  |  | $ | 1 |  |  | $ | 111 |  |  | $ | 1,030 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Consumer |  | $ | 903 |  |  | $ | - |  |  | $ | 10 |  |  | $ | - |  |  | $ | 5 |  |  | $ | 1 |  |  | $ | 111 |  |  | $ | 1,030 |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,672,896 |  |  | $ | 1,961,452 |  |  | $ | 470,558 |  |  | $ | 417,862 |  |  | $ | 459,658 |  |  | $ | 1,278,576 |  |  | $ | 1,456,947 |  |  | $ | 7,717,949 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,905 |  |  |  | - |  |  |  | 45,397 |  |  |  | 12,184 |  |  |  | 59,486 |
Substandard |  |  | 7,636 |  |  |  | 2,091 |  |  |  | 4,517 |  |  |  | 14,540 |  |  |  | 30,504 |  |  |  | 50,132 |  |  |  | 23,158 |  |  |  | 132,578 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Grand Total |  | $ | 1,680,532 |  |  | $ | 1,963,543 |  |  | $ | 475,075 |  |  | $ | 434,307 |  |  | $ | 490,162 |  |  | $ | 1,374,105 |  |  | $ | 1,492,289 |  |  | $ | 7,910,013 |
The following table presents loans by origination and risk designation as of December 31, 2021 (dollars in thousands):
|  | Term loans amortized cost basis by origination year |  |  |  |  |  |  |
|  | 2021 |  |  | 2020 |  |  | 2019 |  |  | 2018 |  |  | 8.5 |  |  | Prior |  |  | Revolving Loans |  |  | Total Gross Loans |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 403,203 |  |  | $ | 58,534 |  |  | $ | 54,485 |  |  | $ | 60,409 |  |  | $ | 95,727 |  |  | $ | 86,556 |  |  | $ | 471,588 |  |  | $ | 1,230,502 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | 4,045 |  |  |  | 4,266 |  |  |  | 8,312 |
Substandard |  |  | 170 |  |  |  | - |  |  |  | 1,842 |  |  |  | 13,298 |  |  |  | 9,740 |  |  |  | 21,024 |  |  |  | 14,540 |  |  |  | 60,614 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Commercial |  | $ | 403,373 |  |  | $ | 58,534 |  |  | $ | 56,327 |  |  | $ | 73,707 |  |  | $ | 105,468 |  |  | $ | 111,625 |  |  | $ | 490,394 |  |  | $ | 1,299,428 |
Commercial Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,692,098 |  |  | $ | 533,315 |  |  | $ | 420,995 |  |  | $ | 452,262 |  |  | $ | 497,065 |  |  | $ | 842,244 |  |  | $ | 170,721 |  |  | $ | 4,608,700 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5,142 |  |  |  | 50,438 |  |  |  | 6,601 |  |  |  | 62,181 |
Substandard |  |  | 1,968 |  |  |  | 9,039 |  |  |  | 4,006 |  |  |  | 20,624 |  |  |  | - |  |  |  | 26,108 |  |  |  | 8,964 |  |  |  | 70,709 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Commercial Real Estate |  | $ | 1,694,066 |  |  | $ | 542,354 |  |  | $ | 425,001 |  |  | $ | 472,886 |  |  | $ | 502,207 |  |  | $ | 918,790 |  |  | $ | 186,286 |  |  | $ | 4,741,590 |
Commercial Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 8,018 |  |  | $ | 7,370 |  |  | $ | 12,625 |  |  | $ | 2,600 |  |  | $ | 2,339 |  |  | $ | - |  |  | $ | 490,119 |  |  | $ | 523,071 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 350 |  |  |  | - |  |  |  | 1,443 |  |  |  | 1,793 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 15,314 |  |  |  | 15,314 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Commercial Construction |  | $ | 8,018 |  |  | $ | 7,370 |  |  | $ | 12,625 |  |  | $ | 2,600 |  |  | $ | 2,689 |  |  | $ | - |  |  | $ | 506,876 |  |  | $ | 540,178 |
Residential Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 27,081 |  |  | $ | 29,539 |  |  | $ | 23,611 |  |  | $ | 25,070 |  |  | $ | 28,701 |  |  | $ | 66,249 |  |  | $ | 44,221 |  |  | $ | 244,472 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 7,262 |  |  |  | 3,535 |  |  |  | 10,797 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Residential Real Estate |  | $ | 27,081 |  |  | $ | 29,539 |  |  | $ | 23,611 |  |  | $ | 25,070 |  |  | $ | 28,701 |  |  | $ | 73,511 |  |  | $ | 47,756 |  |  | $ | 255,269 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,590 |  |  | $ | 85 |  |  | $ | 39 |  |  | $ | 21 |  |  | $ | 28 |  |  | $ | - |  |  | $ | 123 |  |  | $ | 1,886 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Consumer |  | $ | 1,590 |  |  | $ | 85 |  |  | $ | 39 |  |  | $ | 21 |  |  | $ | 28 |  |  | $ | - |  |  | $ | 123 |  |  | $ | 1,886 |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 2,131,990 |  |  | $ | 628,843 |  |  | $ | 511,755 |  |  | $ | 540,362 |  |  | $ | 623,860 |  |  | $ | 995,049 |  |  | $ | 1,176,772 |  |  | $ | 6,608,631 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5,493 |  |  |  | 54,483 |  |  |  | 12,310 |  |  |  | 72,286 |
Substandard |  |  | 2,138 |  |  |  | 9,039 |  |  |  | 5,848 |  |  |  | 33,922 |  |  |  | 9,740 |  |  |  | 54,394 |  |  |  | 42,353 |  |  |  | 157,434 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Grand Total |  | $ | 2,134,128 |  |  | $ | 637,882 |  |  | $ | 517,603 |  |  | $ | 574,284 |  |  | $ | 639,093 |  |  | $ | 1,103,926 |  |  | $ | 1,231,435 |  |  | $ | 6,838,351 |
Collateral Dependent Loans: Loans which meet certain criteria are individually evaluated as part of the process of calculating the allowance for credit losses. The evaluation is determined on an individual basis using the fair value of the collateral as of the reporting date. The following table presents collateral dependent loans that were individually evaluated for impairment as of September 30, 2022 and December 31, 2021:
|  | September 30, 2022 |
|  | Real Estate |  |  | Other |  |  | Total |
|  | (dollars in thousands) |
Commercial |  | $ | 5,446 |  |  | $ | 23,449 |  |  | $ | 28,895 |
Commercial real estate |  |  | 64,718 |  |  |  | - |  |  |  | 64,718 |
Commercial construction |  |  | 7,727 |  |  |  | - |  |  |  | 7,727 |
Residential real estate |  |  | 5,634 |  |  |  | - |  |  |  | 5,634 |
Consumer |  |  | - |  |  |  | - |  |  |  | - |
Total |  | $ | 83,525 |  |  | $ | 23,449 |  |  | $ | 106,974 |
|  | December 31, 2021 |
|  | Real Estate |  |  | Other |  |  | Total |
|  | (dollars in thousands) |
Commercial |  | $ | 6,385 |  |  | $ | 26,182 |  |  | $ | 32,567 |
Commercial real estate |  |  | 55,244 |  |  |  | - |  |  |  | 55,244 |
Commercial construction |  |  | 13,196 |  |  |  | - |  |  |  | 13,196 |
Residential real estate |  |  | 8,856 |  |  |  | - |  |  |  | 8,856 |
Consumer |  |  | - |  |  |  | - |  |  |  | - |
Total |  | $ | 83,681 |  |  | $ | 26,182 |  |  | $ | 109,863 |
Aging Analysis - The following table provides an analysis of the aging of the loans by class, excluding net deferred fees, that are past due as of September 30, 2022 and December 31, 2021:
|  | September 30, 2022 |
|  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | 90 Days or Greater Past Due and Still Accruing |  |  | Nonaccrual |  |  | Total Past Due and Nonaccrual |  |  | Current |  |  | Gross Loans |
|  | (dollars in thousands) |
Commercial |  | $ | 171 |  |  | $ | 13 |  |  | $ | 4,392 |  |  | $ | 26,858 |  |  | $ | 31,434 |  |  | $ | 1,417,293 |  |  | $ | 1,448,727 |
Commercial real estate |  |  | - |  |  |  | - |  |  |  | 5,676 |  |  |  | 28,138 |  |  |  | 33,814 |  |  |  | 5,633,034 |  |  |  | 5,666,848 |
Commercial construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 537,323 |  |  |  | 537,323 |
Residential real estate |  |  | 671 |  |  |  | - |  |  |  | - |  |  |  | 2,451 |  |  |  | 3,122 |  |  |  | 252,963 |  |  |  | 256,085 |
Consumer |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,030 |  |  |  | 1,030 |
Total |  | $ | 842 |  |  | $ | 13 |  |  | $ | 10,068 |  |  | $ | 57,447 |  |  | $ | 68,370 |  |  | $ | 7,841,643 |  |  | $ | 7,910,013 |
|  | December 31, 2021 |
|  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | 90 Days or Greater Past Due and Still Accruing |  |  | Nonaccrual |  |  | Total Past Due and Nonaccrual |  |  | Current |  |  | Gross Loans |
|  | (dollars in thousands) |
Commercial |  | $ | 4,305 |  |  | $ | 729 |  |  | $ | 4,457 |  |  | $ | 30,062 |  |  | $ | 39,553 |  |  | $ | 1,259,875 |  |  | $ | 1,299,428 |
Commercial real estate |  |  | 1,622 |  |  |  | 1,009 |  |  |  | 5,935 |  |  |  | 25,393 |  |  |  | 33,959 |  |  |  | 4,707,631 |  |  |  | 4,741,590 |
Commercial construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 3,150 |  |  |  | 3,150 |  |  |  | 537,028 |  |  |  | 540,178 |
Residential real estate |  |  | 1,437 |  |  |  | 292 |  |  |  | 3,139 |  |  |  | 3,095 |  |  |  | 7,963 |  |  |  | 247,306 |  |  |  | 255,269 |
Consumer |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,886 |  |  |  | 1,886 |
Total |  | $ | 7,364 |  |  | $ | 2,030 |  |  | $ | 13,531 |  |  | $ | 61,700 |  |  | $ | 84,625 |  |  | $ | 6,753,726 |  |  | $ | 6,838,351 |
The following tables detail, at the period-end presented, the amount of gross loans (excluding loans held-for-sale) that are evaluated individually, and collectively, for impairment, those acquired with deteriorated quality, and the related portion of the allowance for credit losses that are allocated to each loan portfolio segment:
|  | September 30, 2022 |
|  | Commercial |  |  | Commercial real estate |  |  | Commercial construction |  |  | Residential real estate |  |  | Consumer |  |  | Total |
|  | (dollars in thousands) |
Allowance for credit losses - loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated impairment |  | $ | 10,600 |  |  | $ | 3,235 |  |  | $ | - |  |  | $ | 76 |  |  | $ | - |  |  | $ | 13,911 |
Collectively evaluated impairment |  |  | 16,812 |  |  |  | 49,370 |  |  |  | 3,444 |  |  |  | 3,977 |  |  |  | 5 |  |  |  | 73,608 |
Acquired with deteriorated credit quality individually analyzed |  |  | 2,277 |  |  |  | 1,921 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 4,198 |
Total |  | $ | 29,689 |  |  | $ | 54,526 |  |  | $ | 3,444 |  |  | $ | 4,053 |  |  | $ | 5 |  |  | $ | 91,717 |
Gross loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated impairment |  | $ | 29,482 |  |  | $ | 59,042 |  |  | $ | 7,727 |  |  | $ | 5,634 |  |  | $ | - |  |  | $ | 101,885 |
Collectively evaluated impairment |  |  | 1,414,286 |  |  |  | 5,602,130 |  |  |  | 529,596 |  |  |  | 250,451 |  |  |  | 1,030 |  |  |  | 7,797,493 |
Acquired with deteriorated credit quality individually analyzed |  |  | 4,959 |  |  |  | 5,676 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 10,635 |
Total |  | $ | 1,448,727 |  |  | $ | 5,666,848 |  |  | $ | 537,323 |  |  | $ | 256,085 |  |  | $ | 1,030 |  |  | $ | 7,910,013 |
|  | December 31, 2021 |
|  | Commercial |  |  | Commercial real estate |  |  | Commercial construction |  |  | Residential real estate |  |  | Consumer |  |  | Total |
|  | (dollars in thousands) |
Allowance for credit losses - loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated impairment |  | $ | 15,131 |  |  | $ | 955 |  |  | $ | - |  |  | $ | 131 |  |  | $ | - |  |  | $ | 16,217 |
Collectively evaluated impairment |  |  | 8,561 |  |  |  | 42,713 |  |  |  | 3,580 |  |  |  | 3,497 |  |  |  | 7 |  |  |  | 58,358 |
Acquired with deteriorated credit quality individually analyzed |  |  | 2,277 |  |  |  | 1,921 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 4,198 |
Total |  | $ | 25,969 |  |  | $ | 45,589 |  |  | $ | 3,580 |  |  | $ | 3,628 |  |  | $ | 7 |  |  | $ | 78,773 |
Gross loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated impairment |  | $ | 33,726 |  |  | $ | 49,310 |  |  | $ | 13,196 |  |  | $ | 5,717 |  |  | $ | - |  |  | $ | 101,949 |
Collectively evaluated impairment |  |  | 1,260,537 |  |  |  | 4,686,346 |  |  |  | 526,982 |  |  |  | 246,413 |  |  |  | 1,886 |  |  |  | 6,722,164 |
Acquired with deteriorated credit quality individually analyzed |  |  | 5,165 |  |  |  | 5,934 |  |  |  | - |  |  |  | 3,139 |  |  |  | - |  |  |  | 14,238 |
Total |  | $ | 1,299,428 |  |  | $ | 4,741,590 |  |  | $ | 540,178 |  |  | $ | 255,269 |  |  | $ | 1,886 |  |  | $ | 6,838,351 |
Activity in the Company’s ACL for loans for the three and nine months ended September 30, 2022 is summarized in the tables below.
|  | Three Months Ended September 30, 2022 |
|  | Commercial |  |  | Commercial real estate |  |  | Commercial construction |  |  | Residential real estate |  |  | Consumer |  |  | Unallocated |  |  | Total |
|  | (dollars in thousands) |
Balance as of June 30, 2022 |  | $ | 28,135 |  |  | $ | 47,562 |  |  | $ | 3,413 |  |  | $ | 3,625 |  |  | $ | 4 |  |  | $ | - |  |  | $ | 82,739 |
Charge-offs |  |  | (410 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (3 | ) |  |  | - |  |  |  | (413 | )
Recoveries |  |  | 53 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 53 |
Provision for credit losses - loans |  |  | 1,911 |  |  |  | 6,964 |  |  |  | 31 |  |  |  | 428 |  |  |  | 4 |  |  |  | - |  |  |  | 9,338 |
Balance as of September 30, 2022 |  | $ | 29,689 |  |  | $ | 54,526 |  |  | $ | 3,444 |  |  | $ | 4,053 |  |  | $ | 5 |  |  | $ | - |  |  | $ | 91,717 |
|  | Nine Months Ended September 30, 2022 |
|  | Commercial |  |  | Commercial real estate |  |  | Commercial construction |  |  | Residential real estate |  |  | Consumer |  |  | Unallocated |  |  | Total |
|  | (dollars in thousands) |
Balance as of December 31, 2021 |  | $ | 25,969 |  |  | $ | 45,589 |  |  | $ | 3,580 |  |  | $ | 3,628 |  |  | $ | 7 |  |  | $ | - |  |  | $ | 78,773 |
Charge-offs |  |  | (751 | ) |  |  | (226 | ) |  |  | - |  |  |  | (9 | ) |  |  | (3 | ) |  |  | - |  |  |  | (989 | )
Recoveries |  |  | 54 |  |  |  | - |  |  |  | - |  |  |  | 63 |  |  |  | - |  |  |  | - |  |  |  | 117 |
Provision for credit losses - loans |  |  | 4,417 |  |  |  | 9,163 |  |  |  | (136 | ) |  |  | 371 |  |  |  | 1 |  |  |  | - |  |  |  | 13,816 |
Balance as of September 30, 2022 |  | $ | 29,689 |  |  | $ | 54,526 |  |  | $ | 3,444 |  |  | $ | 4,053 |  |  | $ | 5 |  |  | $ | - |  |  | $ | 91,717 |
Activity in the Company’s ACL for loans for the three and nine months ended September 30, 2021 is summarized in the table below. The CECL Day 1 row in the table for the nine months ended September 30, 2021 presents adjustments recorded through retained earnings to adopt the CECL standard and the increase to the ACL for loans associated with nonaccretable purchase accounting marks on loans that were classified as purchased credit-impaired as of December 31, 2020.
|  | Three Months Ended September 30, 2021 |
|  | Commercial |  |  | Commercial real estate |  |  | Commercial construction |  |  | Residential real estate |  |  | Consumer |  |  | Unallocated |  |  | Total |
|  | (dollars in thousands) |
Balance as of June 30, 2021 |  | $ | 25,567 |  |  | $ | 43,815 |  |  | $ | 4,927 |  |  | $ | 4,366 |  |  | $ | 9 |  |  | $ | - |  |  | $ | 78,684 |
Charge-offs |  |  | (254 | ) |  |  | (1,473 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,727 | )
Recoveries |  |  | 1 |  |  |  | 85 |  |  |  | - |  |  |  | 20 |  |  |  | 7 |  |  |  | - |  |  |  | 113 |
(Reversal of) provision for credit losses - loans |  |  | 2,022 |  |  |  | 915 |  |  |  | (1,225 | ) |  |  | (788 | ) |  |  | (8 | ) |  |  | - |  |  |  | 916 |
Balance as of September 30, 2021 |  | $ | 27,336 |  |  | $ | 43,342 |  |  | $ | 3,702 |  |  | $ | 3,598 |  |  | $ | 8 |  |  | $ | - |  |  | $ | 77,986 |
|  | Nine Months Ended September 30, 2021 |
|  | Commercial |  |  | Commercial real estate |  |  | Commercial construction |  |  | Residential real estate |  |  | Consumer |  |  | Unallocated |  |  | Total |
|  | (dollars in thousands) |
Balance as of December 31, 2020 |  | $ | 28,443 |  |  | $ | 39,330 |  |  | $ | 8,194 |  |  | $ | 2,687 |  |  | $ | 4 |  |  | $ | 568 |  |  | $ | 79,226 |
Day 1 effect of CECL |  |  | (4,225 | ) |  |  | 9,605 |  |  |  | (961 | ) |  |  | 2,697 |  |  |  | 9 |  |  |  | (568 | ) |  |  | 6,557 |
Balance as of January 1, 2021 as adjusted for changes in accounting principle |  |  | 24,218 |  |  |  | 48,935 |  |  |  | 7,233 |  |  |  | 5,384 |  |  |  | 13 |  |  |  | - |  |  |  | 85,783 |
Charge-offs |  |  | (304 | ) |  |  | (1,628 | ) |  |  | - |  |  |  | (7 | ) |  |  | - |  |  |  | - |  |  |  | (1,939 | )
Recoveries |  |  | 74 |  |  |  | 85 |  |  |  | - |  |  |  | 20 |  |  |  | 9 |  |  |  | - |  |  |  | 188 |
(Reversal of) provision for credit losses - loans |  |  | 3,348 |  |  |  | (4,050 | ) |  |  | (3,531 | ) |  |  | (1,799 | ) |  |  | (14 | ) |  |  | - |  |  |  | (6,046 | )
Balance as of September 30, 2021 |  | $ | 27,336 |  |  | $ | 43,342 |  |  | $ | 3,702 |  |  | $ | 3,598 |  |  | $ | 8 |  |  | $ | - |  |  | $ | 77,986 |
Troubled Debt Restructurings Loans are considered to have been modified in a troubled debt restructuring (“TDRs”) when, except as discussed below, due to a borrower’s financial difficulties, the Company makes certain concessions to the borrower that it would not otherwise consider. Modifications may include interest rate reductions, principal or interest forgiveness, forbearance, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. Generally, a nonaccrual loan that has been modified in a troubled debt restructuring remains on nonaccrual status for a period of six months to demonstrate that the borrower is able to meet the terms of the modified loan. However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains on nonaccrual status. As of September 30, 2022, there were no commitments to lend additional funds to borrowers whose loans were on nonaccrual status or were contractually past due 90 days or greater and still accruing interest, or whose terms have been modified in troubled debt restructurings. As of September 30, 2022, TDRs totaled $74.5 million, of which $27.5 million were on nonaccrual status and $47.0 million were performing under their restructured terms. As of December 31, 2021, TDRs totaled $79.5 million, of which $35.9 million were on nonaccrual status and $43.6 million were performing under their restructured terms. The Company has allocated $7.5 million and $10.4 million of specific allowance related to TDRs as of September 30, 2022 and December 31, 2021, respectively. The following table presents loans by class modified as TDRs that occurred during the nine months ended September 30, 2022:
|  |  |  |  |  | Pre-Modification |  |  | Post-Modification |
|  |  |  |  |  | Outstanding |  |  | Outstanding |
|  | Number of |  |  | Recorded |  |  | Recorded |
|  | Loans |  |  | Investment |  |  | Investment |
|  | (dollars in thousands) |
Troubled debt restructurings: |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 2 |  |  | $ | 633 |  |  | $ | 633 |
Commercial real estate |  |  | 2 |  |  |  | 9,043 |  |  |  | 8,543 |
Residential real estate |  |  | 2 |  |  |  | 399 |  |  |  | 399 |
Total |  |  | 6 |  |  | $ | 10,075 |  |  | $ | 9,575 |
The loans modified as a TDR during the nine months ended September 30, 2022 included five maturity extensions and one interest rate reduction. The one loan that was an interest rate reduction was a commercial real estate loan that included a one-time $500,000 principal paydown. There were no TDRs for which there was a payment default within twelve months following the modification during the three and nine months ended September 30, 2022 and September 30, 2021. The following table presents loans by class modified as TDRs that occurred during the nine months ended September 30, 2021:
|  |  |  |  |  | Pre-Modification |  |  | Post-Modification |
|  |  |  |  |  | Outstanding |  |  | Outstanding |
|  | Number of |  |  | Recorded |  |  | Recorded |
|  | Loans |  |  | Investment |  |  | Investment |
|  | (dollars in thousands) |
Troubled debt restructurings: |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 4 |  |  | $ | 1,276 |  |  | $ | 1,276 |
Commercial real estate |  |  | 10 |  |  |  | 35,595 |  |  |  | 35,595 |
Commercial construction |  |  | 1 |  |  |  | 1,641 |  |  |  | 1,641 |
Residential real estate |  |  | 3 |  |  |  | 1,758 |  |  |  | 1,758 |
Total |  |  | 18 |  |  | $ | 40,270 |  |  | $ | 40,270 |
The loans modified as TDRs during the nine months ended September 30, 2021 included maturity extensions and interest rate reductions. Allowance for Credit Losses for Unfunded Commitments The Company has recorded an ACL for unfunded credit commitments, which was recorded in other liabilities. The provision is recorded within the provision for (reversal of) credit losses on the Company’s income statement. The following table presents a rollforward of the allowance for credit losses for unfunded commitments for the three and nine months ended September 30, 2022 and 2021:
|  | Three Months Ended |  |  | Three Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2022 |  |  | 2021 |
|  | (dollars in thousands) |
Balance at beginning of period |  | $ | 2,324 |  |  | $ | 2,380 |
Provision for credit losses - unfunded commitments |  |  | 662 |  |  |  | 184 |
Balance at end of period |  | $ | 2,986 |  |  | $ | 2,564 |
|  | Nine Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2022 |  |  | 2021 |
|  | (dollars in thousands) |
Balance at beginning of period |  | $ | 2,352 |  |  | $ | - |
Day 1 Effect of CECL |  |  | - |  |  |  | 2,833 |
Provision for (reversal of) credit losses - unfunded commitments |  |  | 634 |  |  |  | (269 | )
Balance at end of period |  | $ | 2,986 |  |  | $ | 2,564 |
Components of (Reversal of) Provision for Credit Losses The following table summarizes the provision for (reversal of) credit losses for the three and nine months ended September 30, 2022 and 2021 :
|  | Three Months Ended |  |  | Three Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2022 |  |  | 2021 |
|  | (dollars in thousands) |
Provision for credit losses - loans |  | $ | 9,338 |  |  | $ | 916 |
Provision for credit losses - unfunded commitments |  |  | 662 |  |  |  | 184 |
Provision for credit losses |  | $ | 10,000 |  |  | $ | 1,100 |
|  | Nine Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2022 |  |  | 2021 |
|  | (dollars in thousands) |
Provision for (reversal of) credit losses - loans |  | $ | 13,816 |  |  | $ | (6,046 | )
Provision for (reversal of) credit losses - unfunded commitments |  |  | 634 |  |  |  | (269 | )
Provision for (reversal of) credit losses |  | $ | 14,450 |  |  | $ | (6,315 | )

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI https://asc.fasb.org/subtopic&trid=2196772 + Details
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