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Loans | 12 Months Ended
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Dec. 31, 2022
Receivables [Abstract] |
Loans | Loans Loans held-for-investment consist of the following as of December 31,:
| 2022 |  | 2021
Commercial | $ | 3,025,074 |  |  | $ | 2,414,787 |
Commercial real estate | 1,753,360 |  |  | 1,176,973 |
Residential real estate | 1,106,793 |  |  | 437,116 |
Consumer | 43,706 |  |  | 17,766 |
Total loans | 5,928,933 |  |  | 4,046,642 |
Deferred costs, fees, premiums, and discounts, net | (17,101) |  |  | (9,519) |
Allowance for loan losses | (65,917) |  |  | (47,547) |
Total loans, net | $ | 5,845,915 |  |  | $ | 3,989,576 |
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law. A provision in the CARES Act created the Paycheck Protection Program (PPP), a program administered by the Small Business Administration (“SBA”) to provide loans to small business during the COVID-19 pandemic. As of December 31, 2022 and 2021, we had $4,391 and $68,401 of PPP loans outstanding and deferred processing fees outstanding of $39 and $1,652, respectively. PPP loans are classified as Commercial loans in the consolidated financial statements. No allowance for loan losses has been recognized for PPP loans as such loans are guaranteed by the SBA. The following table presents the activity in the allowance for loan losses by portfolio type for the years ended December 31,:
| Commercial |  | Commercial Real Estate |  | Residential Real Estate |  | Consumer |  | Total
2022 |  |  |  |  |  |  |  |  |
Allowance for loan losses: |  |  |  |  |  |  |  |  |
Balance, beginning of period | $ | 33,277 |  |  | $ | 12,899 |  |  | $ | 1,136 |  |  | $ | 235 |  |  | $ | 47,547 |
Provision for loan losses | 9,655 |  |  | 6,082 |  |  | 2,114 |  |  | 199 |  |  | 18,050 |
Loans charged off | (2,321) |  |  | — |  |  | (122) |  |  | (144) |  |  | (2,587) |
Recoveries | 2,236 |  |  | 388 |  |  | 221 |  |  | 62 |  |  | 2,907 |
Balance, end of period | $ | 42,847 |  |  | $ | 19,369 |  |  | $ | 3,349 |  |  | $ | 352 |  |  | $ | 65,917 |
2021 |  |  |  |  |  |  |  |  |
Allowance for loan losses: |  |  |  |  |  |  |  |  |
Balance, beginning of period | $ | 32,009 |  |  | $ | 13,863 |  |  | $ | 1,606 |  |  | $ | 288 |  |  | $ | 47,766 |
Provision (benefit) for loan losses | 4,017 |  |  | (617) |  |  | (452) |  |  | 52 |  |  | 3,000 |
Loans charged off | (4,296) |  |  | (375) |  |  | (42) |  |  | (148) |  |  | (4,861) |
Recoveries | 1,547 |  |  | 28 |  |  | 24 |  |  | 43 |  |  | 1,642 |
Balance, end of period | $ | 33,277 |  |  | $ | 12,899 |  |  | $ | 1,136 |  |  | $ | 235 |  |  | $ | 47,547 |
2020 |  |  |  |  |  |  |  |  |
Allowance for loan losses: |  |  |  |  |  |  |  |  |
Balance, beginning of period | $ | 17,509 |  |  | $ | 9,645 |  |  | $ | 1,056 |  |  | $ | 336 |  |  | $ | 28,546 |
Provision for loan losses | 17,979 |  |  | 4,527 |  |  | 474 |  |  | 120 |  |  | 23,100 |
Loans charged off | (4,064) |  |  | (581) |  |  | (39) |  |  | (216) |  |  | (4,900) |
Recoveries | 585 |  |  | 272 |  |  | 115 |  |  | 48 |  |  | 1,020 |
Balance, end of period | $ | 32,009 |  |  | $ | 13,863 |  |  | $ | 1,606 |  |  | $ | 288 |  |  | $ | 47,766 |
The following table presents the balance in the allowance for loan losses and the recorded investment by portfolio type based on impairment method for the years ended December 31,:
| Commercial |  | Commercial Real Estate |  | Residential Real Estate |  | Consumer |  | Total
2022 |  |  |  |  |  |  |  |  |
Loans: |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 14,537 |  |  | $ | 10,443 |  |  | $ | 15,739 |  |  | $ | 91 |  |  | $ | 40,810 |
Collectively evaluated for impairment | 3,010,537 |  |  | 1,742,917 |  |  | 1,091,054 |  |  | 43,615 |  |  | 5,888,123 |
Total loans | $ | 3,025,074 |  |  | $ | 1,753,360 |  |  | $ | 1,106,793 |  |  | $ | 43,706 |  |  | $ | 5,928,933 |
Allowance for loan losses: |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 1,101 |  |  | $ | 189 |  |  | $ | 34 |  |  | $ | 88 |  |  | $ | 1,412 |
Collectively evaluated for impairment | 41,746 |  |  | 19,180 |  |  | 3,315 |  |  | 264 |  |  | 64,505 |
Total allowance for loan losses | $ | 42,847 |  |  | $ | 19,369 |  |  | $ | 3,349 |  |  | $ | 352 |  |  | $ | 65,917 |
2021 |  |  |  |  |  |  |  |  |
Loans: |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 17,460 |  |  | $ | 4,781 |  |  | $ | 11,479 |  |  | $ | 2 |  |  | $ | 33,722 |
Collectively evaluated for impairment | 2,397,327 |  |  | 1,172,192 |  |  | 425,637 |  |  | 17,764 |  |  | 4,012,920 |
Total loans | $ | 2,414,787 |  |  | $ | 1,176,973 |  |  | $ | 437,116 |  |  | $ | 17,766 |  |  | $ | 4,046,642 |
Allowance for loan losses: |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 2,517 |  |  | $ | 12 |  |  | $ | 39 |  |  | $ | — |  |  | $ | 2,568 |
Collectively evaluated for impairment | 30,760 |  |  | 12,887 |  |  | 1,097 |  |  | 235 |  |  | 44,979 |
Total allowance for loan losses | $ | 33,277 |  |  | $ | 12,899 |  |  | $ | 1,136 |  |  | $ | 235 |  |  | $ | 47,547 |
The following table presents information related to impaired loans by class of loans as of December 31,:
| Unpaid Principal Balance |  | Recorded Investment |  | Allowance for Loan Losses Allocated |  | Average Recorded Investment
2022 |  |  |  |  |  |  |
With no related allowance recorded: |  |  |  |  |  |  |
Commercial | $ | 8,401 |  |  | $ | 8,207 |  |  | $ | — |  |  | $ | 5,951 |
Commercial real estate | 9,909 |  |  | 9,647 |  |  | — |  |  | 4,674 |
Residential real estate | 14,572 |  |  | 14,903 |  |  | — |  |  | 9,135 |
Consumer | — |  |  | — |  |  | — |  |  | — |
Total loans with no related allowance recorded | 32,882 |  |  | 32,757 |  |  | — |  |  | 19,760 |
With an allowance recorded: |  |  |  |  |  |  |
Commercial | 6,456 |  |  | 6,330 |  |  | 1,101 |  |  | 4,580 |
Commercial real estate | 796 |  |  | 796 |  |  | 189 |  |  | 265 |
Residential real estate | 1,210 |  |  | 836 |  |  | 34 |  |  | 279 |
Consumer | 93 |  |  | 91 |  |  | 88 |  |  | 29 |
Total loans with an allowance recorded | 8,555 |  |  | 8,053 |  |  | 1,412 |  |  | 5,153 |
Total impaired loans | $ | 41,437 |  |  | $ | 40,810 |  |  | $ | 1,412 |  |  | $ | 24,913 |
2021 |  |  |  |  |  |  |
With no related allowance recorded: |  |  |  |  |  |  |
Commercial | $ | 14,619 |  |  | $ | 13,982 |  |  | $ | — |  |  | $ | 10,637 |
Commercial real estate | 4,795 |  |  | 4,706 |  |  | — |  |  | 3,943 |
Residential real estate | 10,754 |  |  | 10,808 |  |  | — |  |  | 7,223 |
Consumer | 3 |  |  | 2 |  |  | — |  |  | 3 |
Total loans with no related allowance recorded | 30,171 |  |  | 29,498 |  |  | — |  |  | 21,806 |
With an allowance recorded: |  |  |  |  |  |  |
Commercial | 3,666 |  |  | 3,478 |  |  | 2,517 |  |  | 2,375 |
Commercial real estate | 124 |  |  | 75 |  |  | 12 |  |  | 57 |
Residential real estate | 665 |  |  | 671 |  |  | 39 |  |  | 462 |
Total loans with an allowance recorded | 4,455 |  |  | 4,224 |  |  | 2,568 |  |  | 2,894 |
Total impaired loans | $ | 34,626 |  |  | $ | 33,722 |  |  | $ | 2,568 |  |  | $ | 24,700 |
Interest income recorded on impaired loans was not material for the years ended December 31, 2022, 2021 and 2020. Credit risk monitoring and management is a continuous process to manage the quality of the loan portfolio. We categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt including current financial information, historical payment experience, credit documentation, public information and current economic trends among other factors. The risk rating system is used as a tool to analyze and monitor loan portfolio quality. Risk ratings meeting an internally specified exposure threshold are updated annually, or more frequently upon the occurrence of a circumstance that affects the credit risk of the loan. We use the following definitions for risk ratings: Substandard - loans are considered “classified” and have a well-defined weakness, or weaknesses, such as loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans are also characterized by the distinct possibility of loss in the future if the deficiencies are not corrected. Doubtful - loans are considered “classified” and have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. There were loans totaling $45 categorized as doubtful as of December 31, 2022. There were no loans categorized as doubtful as of December 31, 2021. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass-rated loans. The following table presents the credit risk profile of our loan portfolio based on our rating categories as of December 31,:
| Non-Classified |  | Classified |  | Total
2022 |  |  |  |  |
Commercial | $ | 2,969,786 |  |  | $ | 55,288 |  |  | $ | 3,025,074 |
Commercial real estate | 1,715,415 |  |  | 37,945 |  |  | 1,753,360 |
Residential real estate | 1,096,108 |  |  | 10,685 |  |  | 1,106,793 |
Consumer | 43,592 |  |  | 114 |  |  | 43,706 |
Total loans | $ | 5,824,901 |  |  | $ | 104,032 |  |  | $ | 5,928,933 |
2021 |  |  |  |  |
Commercial | $ | 2,384,275 |  |  | $ | 30,512 |  |  | $ | 2,414,787 |
Commercial real estate | 1,146,673 |  |  | 30,300 |  |  | 1,176,973 |
Residential real estate | 431,033 |  |  | 6,083 |  |  | 437,116 |
Consumer | 17,762 |  |  | 4 |  |  | 17,766 |
Total loans | $ | 3,979,743 |  |  | $ | 66,899 |  |  | $ | 4,046,642 |
The following table presents our loan portfolio aging analysis as of December 31,:
| Loans Not Past Due |  | Loans 30-59 Days Past Due |  | Loans 60-89 Days Past Due |  | Loans Greater than 90 Days Past Due, Still Accruing |  | Nonaccrual |  | Total
2022 |  |  |  |  |  |  |  |  |  |  |
Commercial | $ | 3,011,872 |  |  | $ | 2,422 |  |  | $ | 815 |  |  | $ | — |  |  | $ | 9,965 |  |  | $ | 3,025,074 |
Commercial real estate | 1,738,024 |  |  | 6,954 |  |  | 99 |  |  | — |  |  | 8,283 |  |  | 1,753,360 |
Residential real estate | 1,077,316 |  |  | 17,237 |  |  | 1,514 |  |  | 98 |  |  | 10,628 |  |  | 1,106,793 |
Consumer | 43,551 |  |  | 60 |  |  | 2 |  |  | — |  |  | 93 |  |  | 43,706 |
Total loans | $ | 5,870,763 |  |  | $ | 26,673 |  |  | $ | 2,430 |  |  | $ | 98 |  |  | $ | 28,969 |  |  | $ | 5,928,933 |
2021 |  |  |  |  |  |  |  |  |  |  |
Commercial | $ | 2,392,205 |  |  | $ | 5,467 |  |  | $ | 623 |  |  | $ | — |  |  | $ | 16,492 |  |  | $ | 2,414,787 |
Commercial real estate | 1,160,244 |  |  | 10,887 |  |  | — |  |  | 1,061 |  |  | 4,781 |  |  | 1,176,973 |
Residential real estate | 424,860 |  |  | 5,794 |  |  | 410 |  |  | — |  |  | 6,052 |  |  | 437,116 |
Consumer | 17,719 |  |  | 45 |  |  | — |  |  | — |  |  | 2 |  |  | 17,766 |
Total loans | $ | 3,995,028 |  |  | $ | 22,193 |  |  | $ | 1,033 |  |  | $ | 1,061 |  |  | $ | 27,327 |  |  | $ | 4,046,642 |
As of December 31, 2022 and 2021, we have a recorded investment in TDRs of $17,086 and $21,699, respectively. We have no commitments to lend additional amounts at December 31, 2022. The modification of the terms of the loans performed for the years ended December 31, 2022 and 2021 respectively, included rate modifications, extensions of the maturity dates or a permanent reduction of the recorded investment in the loans. The following table presents loans by class modified as TDRs that occurred during the years ended December 31,:
| Number of Loans |  | Pre-Modification Outstanding Recorded Investment |  | Post-Modification Outstanding Recorded Investment
2022 |  |  |  |  |
Commercial | 1 |  |  | $ | 248 |  |  | $ | 248 |
Residential real estate | 1 |  |  | 126 |  |  | 126 |
Consumer | 1 |  |  | 72 |  |  | 72 |
Total | 3 |  |  | $ | 446 |  |  | $ | 446 |
2021 |  |  |  |  |
Commercial | 7 |  |  | $ | 6,969 |  |  | $ | 6,969 |
Commercial real estate | 1 |  |  | 2,295 |  |  | 2,295 |
Residential real estate | 4 |  |  | 1,386 |  |  | 1,386 |
Total | 12 |  |  | $ | 10,650 |  |  | $ | 10,650 |
For the years ended December 31, 2022 and 2021 and 2020 the TDRs described above increased the allowance for loan losses by $777, $2,326 and $1,464, respectively. There were no amounts charged-off during the years ended December 31, 2022, 2021 and 2020. For the year ended December 31, 2022, there were loans modified as TDRs totaling $122 for which there was a payment default following the modification. In order to assess whether a borrower is experiencing financial difficulty, an evaluation is performed to determine the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under our internal underwriting policy. A loan is generally considered to be in payment default once it is 30 days contractually past due under the modified terms. Acquired Loans and Loan Discounts: Included in the net loan portfolio as of December 31, 2022 and 2021 is a net accretable discount related to loans acquired within our business combinations in the approximate amounts of $10,292 and $571, respectively. The discount is accreted into income on a level-yield basis over the life of the loans. Loans acquired with evidence of credit quality deterioration at acquisition, for which it was probable that we would not be able to collect all contractual amounts due, were accounted for as purchased credit impaired (“PCI”) loans. The outstanding balance represents the total amount owed, including accrued but unpaid interest, and any amounts previously charged off. The carrying amount of purchased credit impaired loans is not significant as of December 31, 2022 and 2021.

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