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v3.23.3

Loans | 9 Months Ended
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Sep. 30, 2023
Receivables [Abstract] |
Loans | Loans Loans held-for-investment by portfolio type consist of the following as of:
| September 30, 2023 |  | December 31, 2022
Commercial and industrial | $ | 2,459,358 |  |  | $ | 2,310,929 |
Commercial real estate: |  |  |
Non-owner occupied | 767,135 |  |  | 779,546 |
Owner occupied | 631,352 |  |  | 636,272 |
Construction and land | 329,433 |  |  | 327,817 |
Multifamily | 114,535 |  |  | 102,068 |
Total commercial real estate | 1,842,455 |  |  | 1,845,703 |
Residential real estate | 1,059,074 |  |  | 1,003,931 |
Public finance | 602,844 |  |  | 590,284 |
Consumer | 37,681 |  |  | 42,588 |
Other | 178,110 |  |  | 118,397 |
Total loans | $ | 6,179,522 |  |  | $ | 5,911,832 |
Allowance for credit losses | (78,666) |  |  | (65,917) |
Loans, net of allowance for credit losses | $ | 6,100,856 |  |  | $ | 5,845,915 |
As of September 30, 2023 and December 31, 2022, we had net deferred fees, costs, premiums and discounts of $14,474 and $17,101, respectively, on our loan portfolio. Accrued interest receivable on loans totaled $34,890 and $26,494 at September 30, 2023 and December 31, 2022, respectively, and is included in accrued interest receivable in the accompanying consolidated balance sheets. The following table presents the activity in the allowance for credit losses by portfolio type for the three months ended September 30,:
| Commercial and Industrial |  | Commercial Real Estate |  | Residential Real Estate |  | Public Finance |  | Consumer |  | Other |  | Total
2023 |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, beginning of period | $ | 33,197 |  |  | $ | 21,598 |  |  | $ | 14,959 |  |  | $ | 5,506 |  |  | $ | 854 |  |  | $ | 1,248 |  |  | $ | 77,362 |
Provision (benefit) for credit losses | 4,252 |  |  | 1,495 |  |  | (2,429) |  |  | 135 |  |  | (28) |  |  | 175 |  |  | 3,600 |
Loans charged off | (2,963) |  |  | — |  |  | — |  |  | — |  |  | (136) |  |  | — |  |  | (3,099) |
Recoveries | 155 |  |  | 9 |  |  | 627 |  |  | — |  |  | 12 |  |  | — |  |  | 803 |
Balance, end of period | $ | 34,641 |  |  | $ | 23,102 |  |  | $ | 13,157 |  |  | $ | 5,641 |  |  | $ | 702 |  |  | $ | 1,423 |  |  | $ | 78,666 |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, beginning of period | $ | 33,305 |  |  | $ | 18,351 |  |  | $ | 2,418 |  |  | $ | 1,538 |  |  | $ | 318 |  |  | $ | 147 |  |  | $ | 56,077 |
Provision for (benefit from) credit losses | 2,394 |  |  | 1,213 |  |  | 222 |  |  | (108) |  |  | 32 |  |  | (3) |  |  | 3,750 |
Loans charged off | (223) |  |  | — |  |  | (24) |  |  | — |  |  | (53) |  |  | — |  |  | (300) |
Recoveries | 112 |  |  | 2 |  |  | 1 |  |  | — |  |  | 36 |  |  | — |  |  | 151 |
Balance, end of period | $ | 35,588 |  |  | $ | 19,566 |  |  | $ | 2,617 |  |  | $ | 1,430 |  |  | $ | 333 |  |  | $ | 144 |  |  | $ | 59,678 |
The following table presents the activity in the allowance for credit losses by portfolio type for the nine months ended September 30,:
| Commercial and Industrial |  | Commercial Real Estate |  | Residential Real Estate |  | Public Finance |  | Consumer |  | Other |  | Total
2023 |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, beginning of period | $ | 40,785 |  |  | $ | 19,754 |  |  | $ | 2,963 |  |  | $ | 1,664 |  |  | $ | 352 |  |  | $ | 399 |  |  | $ | 65,917 |
Impact of adopting ASC 326 | (13,583) |  |  | 3,867 |  |  | 10,256 |  |  | 3,890 |  |  | 249 |  |  | 577 |  |  | 5,256 |
Provision (benefit) for credit losses | 10,941 |  |  | (531) |  |  | (710) |  |  | 87 |  |  | 326 |  |  | 447 |  |  | 10,560 |
Loans charged off | (3,751) |  |  | — |  |  | — |  |  | — |  |  | (268) |  |  | — |  |  | (4,019) |
Recoveries | 249 |  |  | 12 |  |  | 648 |  |  | — |  |  | 43 |  |  | — |  |  | 952 |
Balance, end of period | $ | 34,641 |  |  | $ | 23,102 |  |  | $ | 13,157 |  |  | $ | 5,641 |  |  | $ | 702 |  |  | $ | 1,423 |  |  | $ | 78,666 |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, beginning of period | $ | 31,622 |  |  | $ | 13,198 |  |  | $ | 836 |  |  | $ | 1,544 |  |  | $ | 235 |  |  | $ | 112 |  |  | $ | 47,547 |
Provision (benefit) for credit losses | 4,304 |  |  | 6,365 |  |  | 1,707 |  |  | (114) |  |  | 156 |  |  | 32 |  |  | 12,450 |
Loans charged off | (2,173) |  |  | — |  |  | (122) |  |  | — |  |  | (117) |  |  | — |  |  | (2,412) |
Recoveries | 1,835 |  |  | 3 |  |  | 196 |  |  | — |  |  | 59 |  |  | — |  |  | 2,093 |
Balance, end of period | $ | 35,588 |  |  | $ | 19,566 |  |  | $ | 2,617 |  |  | $ | 1,430 |  |  | $ | 333 |  |  | $ | 144 |  |  | $ | 59,678 |
We determine the allowance for credit losses estimate on at least a quarterly basis. As of September 30, 2023 and December 31, 2022, we had an allowance for credit losses on unfunded commitments of $2,209 and $1,313, respectively. For the three months ended September 30, 2023 and 2022 we recorded a provision for credit losses on unfunded commitments of $290 and $350, respectively. For the nine months ended September 30, 2023 and 2022 we recorded a provision for credit losses on unfunded commitments of $1,112 and $475, respectively. The following table presents our loan portfolio aging analysis as of:
| 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
September 30, 2023 |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 2,441,207 |  |  | $ | 2,858 |  |  | $ | 3,065 |  |  | $ | 193 |  |  | $ | 12,035 |  |  | $ | 2,459,358 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |
Non-owner occupied | 762,297 |  |  | 111 |  |  | 545 |  |  | — |  |  | 4,182 |  |  | 767,135 |
Owner occupied | 629,542 |  |  | 450 |  |  | 620 |  |  | — |  |  | 740 |  |  | 631,352 |
Construction and land | 329,206 |  |  | 39 |  |  | — |  |  | — |  |  | 188 |  |  | 329,433 |
Multifamily | 114,535 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 114,535 |
Total commercial real estate | 1,835,580 |  |  | 600 |  |  | 1,165 |  |  | — |  |  | 5,110 |  |  | 1,842,455 |
Residential real estate | 1,036,230 |  |  | 575 |  |  | 1,697 |  |  | 18 |  |  | 20,554 |  |  | 1,059,074 |
Public Finance | 602,844 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 602,844 |
Consumer | 37,590 |  |  | 90 |  |  | — |  |  | — |  |  | 1 |  |  | 37,681 |
Other | 175,278 |  |  | — |  |  | — |  |  | — |  |  | 2,832 |  |  | 178,110 |
Total loans | $ | 6,128,729 |  |  | $ | 4,123 |  |  | $ | 5,927 |  |  | $ | 211 |  |  | $ | 40,532 |  |  | $ | 6,179,522 |
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 2,298,207 |  |  | $ | 2,409 |  |  | $ | 819 |  |  | $ | — |  |  | $ | 9,494 |  |  | $ | 2,310,929 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |
Non-owner occupied | 773,042 |  |  | 4,356 |  |  | — |  |  | — |  |  | 2,148 |  |  | 779,546 |
Owner occupied | 630,335 |  |  | — |  |  | — |  |  | — |  |  | 5,937 |  |  | 636,272 |
Construction and land | 324,888 |  |  | 2,632 |  |  | 99 |  |  | — |  |  | 198 |  |  | 327,817 |
Multifamily | 102,068 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 102,068 |
Total commercial real estate | 1,830,333 |  |  | 6,988 |  |  | 99 |  |  | — |  |  | 8,283 |  |  | 1,845,703 |
Residential real estate | 974,450 |  |  | 17,231 |  |  | 1,524 |  |  | 98 |  |  | 10,628 |  |  | 1,003,931 |
Public Finance | 590,284 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 590,284 |
Consumer | 42,434 |  |  | 58 |  |  | 3 |  |  | — |  |  | 93 |  |  | 42,588 |
Other | 117,926 |  |  | — |  |  | — |  |  | — |  |  | 471 |  |  | 118,397 |
Total loans | $ | 5,853,634 |  |  | $ | 26,686 |  |  | $ | 2,445 |  |  | $ | 98 |  |  | $ | 28,969 |  |  | $ | 5,911,832 |
Interest income recorded on nonperforming loans was not material for the three and nine months ended September 30, 2023 and 2022. Credit risk monitoring and management is a continuous process to manage the quality of the loan portfolio. We segment loans into risk categories based on relevant borrower risk profile information, including the ability of borrowers to service their debt based on 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 movements in 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: Pass – Loans classified as Pass have a well-defined primary source of repayment, an acceptable financial position profile (including capitalization), profitability and minimal operating risk. Pass/Watch – Pass/Watch loans require close attention by bank management and enhanced monitoring due to quantitative or qualitative concerns linked to adverse trends or near-term uncertainty. A covenant default or other type of requirement shortfall may have arisen subsequent to a loan's booking or borrower now shows signs of weakness in the overall base of confirmable financial resources available to repay the loan. However, overall financial capacity & performance are considered sufficient to support an expectation of continued payment performance and / or mitigating factors exist that are expected to limit the risk of near term default and loss. Special Mention – Special Mention loans have identified potential weaknesses that are of sufficient materiality to require management’s (persistent) close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the bank's credit position under normal business operations. Special Mention loans contain greater than acceptable risk to warrant increases in credit exposure and are thus considered “criticized”, non-pass rated credits. They may contain weaknesses (that have arisen due to deteriorating conditions since origination) and / or underwriting exceptions that are not currently offset by mitigating factors. However, these weaknesses, while sufficient to constitute significantly elevated credit risk, are not sufficient to support a conclusion that the liquidation of the debt is in significant jeopardy. Substandard - Accruing – Substandard - Accruing loans are inadequately protected by the current sound net worth and paying capacity of the obligor(s). Loans classified as Substandard - Accruing possess one or more well-defined weaknesses that are expected to jeopardize their liquidation but the weaknesses have not progressed to a point where recent late payments on the loan have become more than 90 days past due. These loans are characterized by the distinct possibility that the bank may sustain up to a moderate but not significant level of loss if such weaknesses are not corrected. Losses for Substandard - Accruing loans are moderated by the lower likelihood of ultimate default and the existence of relatively favorable secondary repayment protection. These loans are considered “nonperforming”. Substandard - Nonaccrual – Substandard - Nonaccrual loans are inadequately protected by the current sound net worth and paying capacity of the obligor or the collateral pledged, if any. Loans classified as Substandard - Nonaccrual possess material, well-defined weaknesses that are expected to jeopardize their liquidation and have progressed to a point where consistently late payments on the loan have become more than 90 or more days past due. These loans are characterized by the distinct possibility that the bank may sustain a material level of loss if such weaknesses are not corrected. Losses for Substandard - Nonaccrual loans are prone to being elevated based on the strong likelihood of the loan remaining in payment default and an undesirable level of secondary repayment protection. These loans are considered “nonperforming”. Doubtful – Loans classified as Doubtful possess all of the weaknesses inherent in loans classified as Substandard - Nonaccrual with the added characteristic that the weaknesses make collection or liquidation in full highly questionable or improbable based on currently existing facts, conditions and values. A high probability of substantial loss or possible total loss exists. Loans rated as doubtful are not rated as loss because certain events may occur that could salvage at least a portion of the debt. These events include injections of capital, additions of pledged collateral or possible mezzanine debt refinancing options. However, without the occurrence of such events, total loss may be possible. No definite repayment schedule exists for these loans. The Doubtful grade is a temporary grade. If a near term recovery of a portion of the loan balance is indeterminable or unlikely to occur, the remaining balance of the loan should be written off and possible future recoveries may partially offset the full write-off of the loan. These loans are considered “nonperforming”. Loss – Loans classified as Loss are defaulted loans with limited or immaterial recovery prospects. No loan that has not yet defaulted should be classified at this grade level. This rating level tends to be very short lived as the full balance of the loan tends to be fully written off nearly immediately after a change to this rating level. These loans are considered “nonperforming”. The following table presents the amortized cost by segment of loans by risk category and origination date as of September 30, 2023 and gross charge-offs by origination date for the nine months ended September 30, 2023:
|  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |  |  |  | Revolving Loans Converted to Term |  | Revolving |  | Total
Commercial and industrial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 300,415 |  |  | $ | 480,464 |  |  | $ | 388,085 |  |  | $ | 154,171 |  |  | $ | 45,291 |  |  | $ | 48,799 |  |  |  |  | $ | 26,617 |  |  | $ | 803,301 |  |  | $ | 2,247,143 |
Pass/Watch |  | 9,176 |  |  | 2,522 |  |  | 7,001 |  |  | 2,484 |  |  | 1,483 |  |  | 1,626 |  |  |  |  | 167 |  |  | 68,825 |  |  | 93,284 |
Special Mention |  | 3,526 |  |  | 38,881 |  |  | 30,790 |  |  | 1,290 |  |  | 684 |  |  | 1,061 |  |  |  |  | 199 |  |  | 7,662 |  |  | 84,093 |
Substandard - Accruing |  | 630 |  |  | — |  |  | 5,648 |  |  | 5,888 |  |  | 1,406 |  |  | 3,680 |  |  |  |  | 3,304 |  |  | 2,247 |  |  | 22,803 |
Substandard - Nonaccrual |  | — |  |  | — |  |  | 3,180 |  |  | 6,656 |  |  | 796 |  |  | 395 |  |  |  |  | — |  |  | 96 |  |  | 11,123 |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | 570 |  |  | 35 |  |  |  |  | 250 |  |  | 57 |  |  | 912 |
Total commercial and industrial |  | $ | 313,747 |  |  | $ | 521,867 |  |  | $ | 434,704 |  |  | $ | 170,489 |  |  | $ | 50,230 |  |  | $ | 55,596 |  |  |  |  | $ | 30,537 |  |  | $ | 882,188 |  |  | $ | 2,459,358 |
Gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | 395 |  |  | $ | — |  |  | $ | — |  |  | $ | 366 |  |  |  |  | $ | 2,990 |  |  | $ | — |  |  | $ | 3,751 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-owner occupied: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 52,362 |  |  | $ | 98,135 |  |  | $ | 129,180 |  |  | $ | 111,588 |  |  | $ | 69,011 |  |  | $ | 183,353 |  |  |  |  | $ | 20,935 |  |  | $ | 54,485 |  |  | $ | 719,049 |
Pass/Watch |  | — |  |  | — |  |  | — |  |  | 986 |  |  | — |  |  | 23,562 |  |  |  |  | 1,300 |  |  | — |  |  | 25,848 |
Special Mention |  | — |  |  | 3,542 |  |  | — |  |  | 2,857 |  |  | — |  |  | — |  |  |  |  | — |  |  | — |  |  | 6,399 |
Substandard - Accruing |  | — |  |  | — |  |  | — |  |  | 1,895 |  |  | — |  |  | 9,762 |  |  |  |  | — |  |  | — |  |  | 11,657 |
Substandard - Nonaccrual |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,182 |  |  |  |  | — |  |  | — |  |  | 4,182 |
Total non-owner occupied |  | $ | 52,362 |  |  | $ | 101,677 |  |  | $ | 129,180 |  |  | $ | 117,326 |  |  | $ | 69,011 |  |  | $ | 220,859 |  |  |  |  | $ | 22,235 |  |  | $ | 54,485 |  |  | $ | 767,135 |
Gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Owner occupied: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 60,548 |  |  | $ | 85,790 |  |  | $ | 118,772 |  |  | $ | 117,027 |  |  | $ | 67,740 |  |  | $ | 127,986 |  |  |  |  | $ | 2,455 |  |  | $ | 6,553 |  |  | $ | 586,871 |
Pass/Watch |  | 605 |  |  | 909 |  |  | 990 |  |  | 1,427 |  |  | 1,457 |  |  | 1,601 |  |  |  |  | — |  |  | 1,628 |  |  | 8,617 |
Special Mention |  | — |  |  | 495 |  |  | 1,623 |  |  | 1,990 |  |  | 488 |  |  | 4,391 |  |  |  |  | — |  |  | — |  |  | 8,987 |
Substandard - Accruing |  | — |  |  | 463 |  |  | 638 |  |  | 6,805 |  |  | 2,252 |  |  | 15,979 |  |  |  |  | — |  |  | — |  |  | 26,137 |
Substandard - Nonaccrual |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 740 |  |  |  |  | — |  |  | — |  |  | 740 |
Total owner occupied |  | $ | 61,153 |  |  | $ | 87,657 |  |  | $ | 122,023 |  |  | $ | 127,249 |  |  | $ | 71,937 |  |  | $ | 150,697 |  |  |  |  | $ | 2,455 |  |  | $ | 8,181 |  |  | $ | 631,352 |
Gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Construction & land: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 25,539 |  |  | $ | 143,285 |  |  | $ | 60,953 |  |  | $ | 35,204 |  |  | $ | 13,554 |  |  | $ | 9,458 |  |  |  |  | $ | 15,369 |  |  | $ | 21,651 |  |  | $ | 325,013 |
Pass/Watch |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 16 |  |  |  |  | — |  |  | — |  |  | 16 |
Special Mention |  | — |  |  | — |  |  | 1,394 |  |  | 2,256 |  |  | — |  |  | — |  |  |  |  | — |  |  | — |  |  | 3,650 |
Substandard - Accruing |  | — |  |  | — |  |  | 566 |  |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | — |  |  | 566 |
Substandard - Nonaccrual |  | — |  |  | — |  |  | — |  |  | 188 |  |  | — |  |  | — |  |  |  |  | — |  |  | — |  |  | 188 |
Total construction & land |  | $ | 25,539 |  |  | $ | 143,285 |  |  | $ | 62,913 |  |  | $ | 37,648 |  |  | $ | 13,554 |  |  | $ | 9,474 |  |  |  |  | $ | 15,369 |  |  | $ | 21,651 |  |  | $ | 329,433 |
Gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Multifamily: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,362 |  |  | $ | 47,809 |  |  | $ | 36,731 |  |  | $ | 12,973 |  |  | $ | 2,723 |  |  | $ | 6,060 |  |  |  |  | $ | — |  |  | $ | 5,572 |  |  | $ | 113,230 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,305 |  |  | — |  |  |  |  | — |  |  | — |  |  | 1,305 |
Total multifamily |  | $ | 1,362 |  |  | $ | 47,809 |  |  | $ | 36,731 |  |  | $ | 12,973 |  |  | $ | 4,028 |  |  | $ | 6,060 |  |  |  |  | $ | — |  |  | $ | 5,572 |  |  | $ | 114,535 |
Gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |
|  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |  |  |  | Revolving Loans Converted to Term |  | Revolving |  | Total
Total commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 139,811 |  |  | $ | 375,019 |  |  | $ | 345,636 |  |  | $ | 276,792 |  |  | $ | 153,028 |  |  | $ | 326,857 |  |  |  |  | $ | 38,759 |  |  | $ | 88,261 |  |  | $ | 1,744,163 |
Pass/Watch |  | 605 |  |  | 909 |  |  | 990 |  |  | 2,413 |  |  | 1,457 |  |  | 25,179 |  |  |  |  | 1,300 |  |  | 1,628 |  |  | 34,481 |
Special Mention |  | — |  |  | 4,037 |  |  | 3,017 |  |  | 7,103 |  |  | 1,793 |  |  | 4,391 |  |  |  |  | — |  |  | — |  |  | 20,341 |
Substandard - Accruing |  | — |  |  | 463 |  |  | 1,204 |  |  | 8,700 |  |  | 2,252 |  |  | 25,741 |  |  |  |  | — |  |  | — |  |  | 38,360 |
Substandard - Nonaccrual |  | — |  |  | — |  |  | — |  |  | 188 |  |  | — |  |  | 4,922 |  |  |  |  | — |  |  | — |  |  | 5,110 |
Total commercial real estate: |  | $ | 140,416 |  |  | $ | 380,428 |  |  | $ | 350,847 |  |  | $ | 295,196 |  |  | $ | 158,530 |  |  | $ | 387,090 |  |  |  |  | $ | 40,059 |  |  | $ | 89,889 |  |  | $ | 1,842,455 |
Gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 88,688 |  |  | $ | 572,932 |  |  | $ | 118,264 |  |  | $ | 38,618 |  |  | $ | 38,835 |  |  | $ | 152,436 |  |  |  |  | $ | 1,670 |  |  | $ | 14,804 |  |  | $ | 1,026,247 |
Pass/Watch |  | 173 |  |  | 4,881 |  |  | 28 |  |  | — |  |  | 350 |  |  | 4,808 |  |  |  |  | 179 |  |  | — |  |  | 10,419 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | 256 |  |  | 1,478 |  |  |  |  | — |  |  | — |  |  | 1,734 |
Substandard - Accruing |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 120 |  |  |  |  | — |  |  | — |  |  | 120 |
Substandard - Nonaccrual |  | — |  |  | 5,706 |  |  | 3,240 |  |  | 2,223 |  |  | 3,942 |  |  | 5,408 |  |  |  |  | — |  |  | 35 |  |  | 20,554 |
Total residential real estate |  | $ | 88,861 |  |  | $ | 583,519 |  |  | $ | 121,532 |  |  | $ | 40,841 |  |  | $ | 43,383 |  |  | $ | 164,250 |  |  |  |  | $ | 1,849 |  |  | $ | 14,839 |  |  | $ | 1,059,074 |
Gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Public Finance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 31,609 |  |  | $ | — |  |  | $ | 43,980 |  |  | $ | 178,130 |  |  | $ | 203,950 |  |  | $ | 137,539 |  |  |  |  | $ | — |  |  | $ | 2 |  |  | $ | 595,210 |
Pass/Watch |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,634 |  |  | — |  |  |  |  | — |  |  | — |  |  | 7,634 |
Total public finance |  | $ | 31,609 |  |  | $ | — |  |  | $ | 43,980 |  |  | $ | 178,130 |  |  | $ | 211,584 |  |  | $ | 137,539 |  |  |  |  | $ | — |  |  | $ | 2 |  |  | $ | 602,844 |
Gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 2,387 |  |  | $ | 2,590 |  |  | $ | 5,646 |  |  | $ | 9,846 |  |  | $ | 3,674 |  |  | $ | 2,760 |  |  |  |  | $ | 66 |  |  | $ | 9,968 |  |  | $ | 36,937 |
Pass/Watch |  | — |  |  | 62 |  |  | 119 |  |  | 100 |  |  | 187 |  |  | 159 |  |  |  |  | 1 |  |  | 51 |  |  | 679 |
Special Mention |  | — |  |  | — |  |  | 14 |  |  | 8 |  |  | — |  |  | — |  |  |  |  | — |  |  | — |  |  | 22 |
Substandard - Accruing |  | 5 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  | 37 |  |  | — |  |  | 42 |
Substandard - Nonaccrual |  | — |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | — |  |  | 1 |
Total consumer |  | $ | 2,392 |  |  | $ | 2,652 |  |  | $ | 5,780 |  |  | $ | 9,954 |  |  | $ | 3,861 |  |  | $ | 2,919 |  |  |  |  | $ | 104 |  |  | $ | 10,019 |  |  | $ | 37,681 |
Gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | 12 |  |  | $ | 8 |  |  | $ | 71 |  |  | $ | 32 |  |  |  |  | $ | 3 |  |  | $ | 142 |  |  | $ | 268 |
Other: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 7,660 |  |  | $ | 7,808 |  |  | $ | 13,662 |  |  | $ | 6,061 |  |  | $ | 441 |  |  | $ | 10,244 |  |  |  |  | $ | 4,935 |  |  | $ | 117,017 |  |  | $ | 167,828 |
Pass/Watch |  | — |  |  | — |  |  | 2,332 |  |  | — |  |  | 2,391 |  |  | — |  |  |  |  | — |  |  | — |  |  | 4,723 |
Substandard - Accruing |  | — |  |  | — |  |  | 2,727 |  |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | — |  |  | 2,727 |
Substandard - Nonaccrual |  | — |  |  | — |  |  | 2,398 |  |  | — |  |  | — |  |  | — |  |  |  |  | 434 |  |  | — |  |  | 2,832 |
Total other |  | $ | 7,660 |  |  | $ | 7,808 |  |  | $ | 21,119 |  |  | $ | 6,061 |  |  | $ | 2,832 |  |  | $ | 10,244 |  |  |  |  | $ | 5,369 |  |  | $ | 117,017 |  |  | $ | 178,110 |
Gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |
|  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |  |  |  | Revolving Loans Converted to Term |  | Revolving |  | Total
Total loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 570,570 |  |  | $ | 1,438,813 |  |  | $ | 915,273 |  |  | $ | 663,618 |  |  | $ | 445,219 |  |  | $ | 678,635 |  |  |  |  | $ | 72,047 |  |  | $ | 1,033,353 |  |  | $ | 5,817,528 |
Pass/Watch |  | 9,954 |  |  | 8,374 |  |  | 10,470 |  |  | 4,997 |  |  | 13,502 |  |  | 31,772 |  |  |  |  | 1,647 |  |  | 70,504 |  |  | 151,220 |
Special Mention |  | 3,526 |  |  | 42,918 |  |  | 33,821 |  |  | 8,401 |  |  | 2,733 |  |  | 6,930 |  |  |  |  | 199 |  |  | 7,662 |  |  | 106,190 |
Substandard - Accruing |  | 635 |  |  | 463 |  |  | 9,579 |  |  | 14,588 |  |  | 3,658 |  |  | 29,541 |  |  |  |  | 3,341 |  |  | 2,247 |  |  | 64,052 |
Substandard - Nonaccrual |  | — |  |  | 5,706 |  |  | 8,819 |  |  | 9,067 |  |  | 4,738 |  |  | 10,725 |  |  |  |  | 434 |  |  | 131 |  |  | 39,620 |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | 570 |  |  | 35 |  |  |  |  | 250 |  |  | 57 |  |  | 912 |
Total loans |  | $ | 584,685 |  |  | $ | 1,496,274 |  |  | $ | 977,962 |  |  | $ | 700,671 |  |  | $ | 470,420 |  |  | $ | 757,638 |  |  |  |  | $ | 77,918 |  |  | $ | 1,113,954 |  |  | $ | 6,179,522 |
Gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | 407 |  |  | $ | 8 |  |  | $ | 71 |  |  | $ | 398 |  |  |  |  | $ | 2,993 |  |  | $ | 142 |  |  | $ | 4,019 |
The following table presents the credit risk profile of our loan portfolio based on our rating categories as of December 31, 2022, which is prior to the adoption of ASU 2016-13 on January 1, 2023 and continue to be reported under ASC 310, Receivables. For a description of these risk ratings, please see our 2022 Annual Report. Amounts are presented at unpaid principal balance.
| Non-Classified |  | Classified |  | Total
Commercial and industrial | $ | 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 |
The following table presents information about collateral dependent loans that were individually evaluated for purposes of determining the ACL as of:
| Collateral Dependent Loans With Allowance |  | Collateral Dependent Loans With No Related Allowance |  | Total Collateral Dependent Loans
| Amortized Cost |  | Related Allowance |  | Amortized Cost |  | Amortized Cost |  | Related Allowance
September 30, 2023 |  |  |  |  |  |  |  |  |
Commercial & industrial | $ | 11,991 |  |  | $ | 4,794 |  |  | $ | 44 |  |  | $ | 12,035 |  |  | $ | 4,794 |
Commercial real estate: |  |  |  |  |  |  |  |  |
Non-owner occupied | 96 |  |  | 22 |  |  | 4,086 |  |  | 4,182 |  |  | 22 |
Owner occupied | 614 |  |  | 188 |  |  | 126 |  |  | 740 |  |  | 188 |
Construction and land | — |  |  | — |  |  | 188 |  |  | 188 |  |  | — |
Total commercial real estate | 710 |  |  | 210 |  |  | 4,400 |  |  | 5,110 |  |  | 210 |
Residential real estate | 1,304 |  |  | 74 |  |  | 19,250 |  |  | 20,554 |  |  | 74 |
Consumer | 1 |  |  | 1 |  |  | — |  |  | 1 |  |  | 1 |
Other | — |  |  | — |  |  | 2,832 |  |  | 2,832 |  |  | — |
Total loans | $ | 14,006 |  |  | $ | 5,079 |  |  | $ | 26,526 |  |  | $ | 40,532 |  |  | $ | 5,079 |
December 31, 2022 |  |  |  |  |  |  |  |  |
Commercial & industrial | $ | 6,330 |  |  | $ | 1,101 |  |  | $ | 3,164 |  |  | $ | 9,494 |  |  | $ | 1,101 |
Commercial real estate: |  |  |  |  |  |  |  |  |
Non-owner occupied | 115 |  |  | 36 |  |  | 2,033 |  |  | 2,148 |  |  | 36 |
Owner occupied | 681 |  |  | 153 |  |  | 5,256 |  |  | 5,937 |  |  | 153 |
Construction and land | — |  |  | — |  |  | 198 |  |  | 198 |  |  | — |
Total commercial real estate | 796 |  |  | 189 |  |  | 7,487 |  |  | 8,283 |  |  | 189 |
Residential real estate | 836 |  |  | 34 |  |  | 9,779 |  |  | 10,615 |  |  | 34 |
Consumer | 91 |  |  | 88 |  |  | — |  |  | 91 |  |  | 88 |
Other | — |  |  | — |  |  | 475 |  |  | 475 |  |  | — |
Total loans | $ | 8,053 |  |  | $ | 1,412 |  |  | $ | 20,905 |  |  | $ | 28,958 |  |  | $ | 1,412 |
The allowance related to collateral dependent loans reported in the tables above includes qualitative adjustments applied to the loan portfolio that consider possible changes in circumstances that could ultimately impact credit losses and might not be reflected in historical data or forecasted data incorporated in the quantitative models. Loan Modifications Made to Borrowers Experiencing Financial Difficulty: The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon origination. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. An assessment of whether a borrower is experiencing financial difficulty is made at the time of a modification. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses, a change to the allowance for credit losses is generally not recorded upon modification. Occasionally, the Company modifies loans by providing principal forgiveness that is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses. Additionally, the Company may allow a loan to go interest only for a specified period of time. During the three and nine months ended September 30, 2023, no loans received a material modification based on borrower financial difficulty.

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