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Loans
 12 Months Ended
Dec. 31, 2022
Receivables [Abstract]  
Loans Loans
Loans held-for-investment consist of the following as of December 31,:
20222021
Commercial$3,025,074 $2,414,787 
Commercial real estate1,753,360 1,176,973 
Residential real estate1,106,793 437,116 
Consumer43,706 17,766 
Total loans5,928,933 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,:
CommercialCommercial
Real
Estate		Residential
Real
Estate		ConsumerTotal
2022
Allowance for loan losses:
Balance, beginning of period$33,277 $12,899 $1,136 $235 $47,547 
Provision for loan losses9,655 6,082 2,114 199 18,050 
Loans charged off(2,321)— (122)(144)(2,587)
Recoveries2,236 388 221 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 losses4,017 (617)(452)52 3,000 
Loans charged off(4,296)(375)(42)(148)(4,861)
Recoveries1,547 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 losses17,979 4,527 474 120 23,100 
Loans charged off(4,064)(581)(39)(216)(4,900)
Recoveries585 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,:
CommercialCommercial
Real
Estate		Residential
Real
Estate		ConsumerTotal
2022
Loans:
Individually evaluated for impairment$14,537 $10,443 $15,739 $91 $40,810 
Collectively evaluated for impairment3,010,537 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 impairment41,746 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 impairment2,397,327 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 impairment30,760 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 estate9,909 9,647 — 4,674 
Residential real estate14,572 14,903 — 9,135 
Consumer— — — — 
Total loans with no related allowance recorded32,882 32,757 — 19,760 
With an allowance recorded:
Commercial6,456 6,330 1,101 4,580 
Commercial real estate796 796 189 265 
Residential real estate1,210 836 34 279 
Consumer93 91 88 29 
Total loans with an allowance recorded8,555 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 estate4,795 4,706 — 3,943 
Residential real estate10,754 10,808 — 7,223 
Consumer3 2 — 3 
Total loans with no related allowance recorded30,171 29,498 — 21,806 
With an allowance recorded:
Commercial3,666 3,478 2,517 2,375 
Commercial real estate124 75 12 57 
Residential real estate665 671 39 462 
Total loans with an allowance recorded4,455 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-ClassifiedClassifiedTotal
2022
Commercial$2,969,786 $55,288 $3,025,074 
Commercial real estate1,715,415 37,945 1,753,360 
Residential real estate1,096,108 10,685 1,106,793 
Consumer43,592 114 43,706 
Total loans$5,824,901 $104,032 $5,928,933 
2021
Commercial$2,384,275 $30,512 $2,414,787 
Commercial real estate1,146,673 30,300 1,176,973 
Residential real estate431,033 6,083 437,116 
Consumer17,762 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		NonaccrualTotal
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 
Consumer43,551 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 
Consumer17,719 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
Commercial1 $248 $248 
Residential real estate1 126 126 
Consumer1 72 72 
Total3 $446 $446 
2021
Commercial7 $6,969 $6,969 
Commercial real estate1 2,295 2,295 
Residential real estate4 1,386 1,386 
Total12 $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.