Allowance for Credit Losses on Loans

12 Months Ended

Dec. 31, 2023

Allowance for Credit Loss [Abstract]

During the year ended December 31, 2023, the ACL on loans increased $5.0 million, or 11.7%, due primarily to a provision for credit losses on loans of $4.7 million. The provision for credit losses on loans recognized during the year ended December 31, 2023 was due primarily to growth in balances of collectively evaluated loans. The ACL on loans to Loans receivable increased to 1.11% as December 31, 2023, compared to 1.06% at December 31, 2022 due to changes in the loan mix as loan growth occurred in segments requiring a higher calculated reserve as a percentage of loans including real estate construction and land development loans.

The following tables detail the activity in the ACL on loans by segment and class for the periods indicated:


	Year Ended December 31, 2023
	Beginning Balance		Charge-offs		Recoveries		Provision for (Reversal of) Credit Losses		Ending Balance
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	13,962	$	(719)	$	1,372	$	(3,487)	$	11,128
Owner-occupied CRE	7,480		—		—		1,519		8,999
Non-owner occupied CRE	9,276		—		—		1,900		11,176
Total commercial business	30,718		(719)		1,372		(68)		31,303
Residential real estate	2,872		—		—		601		3,473
Real estate construction and land development:
Residential	1,654		—		—		(11)		1,643
Commercial and multifamily	5,409		—		—		3,824		9,233
Total real estate construction and land development	7,063		—		—		3,813		10,876
Consumer	2,333		(586)		210		390		2,347
Total	$	42,986	$	(1,305)	$	1,582	$	4,736	$	47,999


	Year Ended December 31, 2022
	Beginning Balance		Charge-offs		Recoveries		(Reversal of) Provision for Credit Losses		Ending Balance
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	17,777	$	(280)	$	929	$	(4,464)	$	13,962
Owner-occupied CRE	6,411		(36)		—		1,105		7,480
Non-owner occupied CRE	8,861		—		—		415		9,276
Total commercial business	33,049		(316)		929		(2,944)		30,718
Residential real estate	1,409		(30)		3		1,490		2,872
Real estate construction and land development:
Residential	1,304		—		229		121		1,654
Commercial and multifamily	3,972		—		155		1,282		5,409
Total real estate construction and land development	5,276		—		384		1,403		7,063
Consumer	2,627		(547)		765		(512)		2,333
Total	$	42,361	$	(893)	$	2,081	$	(563)	$	42,986


	Year Ended December 31, 2021
	Beginning Balance		Charge-offs		Recoveries		(Reversal of) Provision for Credit Losses		Ending Balance
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	30,010	$	(917)	$	791	$	(12,107)	$	17,777
Owner-occupied CRE	9,486		(359)		25		(2,741)		6,411
Non-owner occupied CRE	10,112		—		—		(1,251)		8,861
Total commercial business	49,608		(1,276)		816		(16,099)		33,049
Residential real estate	1,591		—		—		(182)		1,409
Real estate construction and land development:
Residential	1,951		—		32		(679)		1,304
Commercial and multifamily	11,141		(1)		—		(7,168)		3,972
Total real estate construction and land development	13,092		(1)		32		(7,847)		5,276
Consumer	5,894		(669)		572		(3,170)		2,627
Total	$	70,185	$	(1,946)	$	1,420	$	(27,298)	$	42,361

The following table details the activity in the ACL on unfunded commitments during the periods indicated:


	Year Ended December 31,
	2023		2022		2021
	(Dollars in thousands)
Balance, beginning of period	$	1,744	$	2,607	$	4,681
Reversal of credit losses on unfunded commitments	(456)		(863)		(2,074)
Balance, end of period	$	1,288	$	1,744	$	2,607