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Note 3 - Loans and Allowance for Credit Losses | 3 Months Ended
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Mar. 31, 2022
Notes to Financial Statements |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] |
3. | LOANS AND ALLOWANCE FOR CREDIT LOSSES
Loans originated for investment are stated at their principal amount outstanding adjusted for partial charge-offs, the allowance, and net deferred loan fees and costs. Interest income on loans is accrued over the term of the loans primarily using the simple interest method based on the principal balance outstanding. Interest is not accrued on loans where collectibility is uncertain. Accrued interest is presented separately in the consolidated balance sheet. Loan origination fees and certain direct costs incurred to extend credit are deferred and amortized over the term of the loan or loan commitment period as an adjustment to the related loan yield.
Our total loans at March 31, 2022 were $3.56 billion compared to $3.45 billion at December 31, 2021, an increase of $102 million, or 3.0%. The components of our loan portfolio disaggregated by class of loan within the loan portfolio segments at March 31, 2022 and December 31, 2021, and the percentage change in loans from the end of 2021 to the end of the first quarter of 2022, are as follows:
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Percent |
|  | March 31, 2022 |  |  | December 31, 2021 |  |  | Increase |
|  | Balance |  |  | % |  |  | Balance |  |  | % |  |  | (Decrease) |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial (1) |  | $ | 1,153,814,000 |  |  |  | 32.4 | % |  | $ | 1,137,419,000 |  |  |  | 32.9 | % |  |  | 1.4 | %
Vacant land, land development, and residential construction |  |  | 52,693,000 |  |  |  | 1.5 |  |  |  | 43,239,000 |  |  |  | 1.3 |  |  |  | 21.9 |
Real estate – owner occupied |  |  | 582,732,000 |  |  |  | 16.4 |  |  |  | 565,758,000 |  |  |  | 16.4 |  |  |  | 3.0 |
Real estate – non-owner occupied |  |  | 1,007,361,000 |  |  |  | 28.3 |  |  |  | 1,027,415,000 |  |  |  | 29.7 |  |  |  | (2.0 | )
Real estate – multi-family and residential rental |  |  | 207,962,000 |  |  |  | 5.9 |  |  |  | 176,593,000 |  |  |  | 5.1 |  |  |  | 17.8 |
Total commercial |  |  | 3,004,562,000 |  |  |  | 84.5 |  |  |  | 2,950,424,000 |  |  |  | 85.4 |  |  |  | 1.8 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family mortgages |  |  | 522,556,000 |  |  |  | 14.7 |  |  |  | 442,547,000 |  |  |  | 12.8 |  |  |  | 18.1 |
Other consumer loans (2) |  |  | 28,672,000 |  |  |  | 0.8 |  |  |  | 60,488,000 |  |  |  | 1.8 |  |  |  | (52.6 | )
Total retail |  |  | 551,228,000 |  |  |  | 15.5 |  |  |  | 503,035,000 |  |  |  | 14.6 |  |  |  | 9.6 |
Total loans |  | $ | 3,555,790,000 |  |  |  | 100.0 | % |  | $ | 3,453,459,000 |  |  |  | 100.0 | % |  |  | 3.0 | %
| (1) | For March 31, 2022, and December 31, 2021, includes $12.2 million and $40.1 million in loans originated under the Paycheck Protection Program, respectively.
| (2) | In conjunction with the adoption of the CECL methodology effective January 1, 2022, home equity lines of credit were reclassified to 1-4 family mortgage loans from other consumer loans. Home equity lines of credit totaled $31.9 million and $29.5 million as of March 31, 2022 and December 31, 2021, respectively.
Nonperforming loans as of March 31, 2022 and December 31, 2021 were as follows:
|  | March 31, |  |  | December 31, |
|  | 2022 |  |  | 2021 |
Loans past due 90 days or more still accruing interest |  | $ | 0 |  |  | $ | 155,000 |
Nonaccrual loans |  |  | 1,612,000 |  |  |  | 2,313,000 |
Total nonperforming loans |  | $ | 1,612,000 |  |  | $ | 2,468,000 |
The recorded principal balance of nonperforming loans was as follows:
|  | March 31, |  |  | December 31, |
|  | 2022 |  |  | 2021 |
Commercial: |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 0 |  |  | $ | 663,000 |
Vacant land, land development, and residential construction |  |  | 0 |  |  |  | 0 |
Real estate – owner occupied |  |  | 0 |  |  |  | 0 |
Real estate – non-owner occupied |  |  | 0 |  |  |  | 0 |
Real estate – multi-family and residential rental |  |  | 0 |  |  |  | 0 |
Total commercial |  |  | 0 |  |  |  | 663,000 |
Retail: |  |  |  |  |  |  |  |
1-4 family mortgages |  |  | 1,610,000 |  |  |  | 1,686,000 |
Other consumer loans |  |  | 2,000 |  |  |  | 119,000 |
Total retail |  |  | 1,612,000 |  |  |  | 1,805,000 |
Total nonperforming loans |  | $ | 1,612,000 |  |  | $ | 2,468,000 |
An age analysis of past due loans is as follows as of March 31, 2022:
|  | 30 – 59 Days Past Due |  |  | 60 – 89 Days Past Due |  |  | Greater Than 89 Days Past Due |  |  | Total Past Due |  |  | Current |  |  | Total Loans |  |  | Recorded Balance > 89 Days and Accruing |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 1,153,814,000 |  |  | $ | 1,153,814,000 |  |  | $ | 0 |
Vacant land, land development, and residential construction |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 52,693,000 |  |  |  | 52,693,000 |  |  |  | 0 |
Real estate – owner occupied |  |  | 1,195,000 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,195,000 |  |  |  | 581,537,000 |  |  |  | 582,732,000 |  |  |  | 0 |
Real estate – non-owner occupied |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,007,361,000 |  |  |  | 1,007,361,000 |  |  |  | 0 |
Real estate – multi-family and residential rental |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 207,962,000 |  |  |  | 207,962,000 |  |  |  | 0 |
Total commercial |  |  | 1,195,000 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,195,000 |  |  |  | 3,003,367,000 |  |  |  | 3,004,562,000 |  |  |  | 0 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family mortgages |  |  | 567,000 |  |  |  | 89,000 |  |  |  | 154,000 |  |  |  | 810,000 |  |  |  | 521,746,000 |  |  |  | 522,556,000 |  |  |  | 0 |
Other consumer loans |  |  | 17,000 |  |  |  | 0 |  |  |  | 0 |  |  |  | 17,000 |  |  |  | 28,655,000 |  |  |  | 28,672,000 |  |  |  | 0 |
Total retail |  |  | 584,000 |  |  |  | 89,000 |  |  |  | 154,000 |  |  |  | 827,000 |  |  |  | 550,401,000 |  |  |  | 551,228,000 |  |  |  | 0 |
Total past due loans |  | $ | 1,779,000 |  |  | $ | 89,000 |  |  | $ | 154,000 |  |  | $ | 2,022,000 |  |  | $ | 3,553,768,000 |  |  | $ | 3,555,790,000 |  |  | $ | 0 |
An age analysis of past due loans is as follows as of December 31, 2021:
|  | 30 – 59 Days Past Due |  |  | 60 – 89 Days Past Due |  |  | Greater Than 89 Days Past Due |  |  | Total Past Due |  |  | Current |  |  | Total Loans |  |  | Recorded Balance > 89 Days and Accruing |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 14,000 |  |  | $ | 0 |  |  | $ | 193,000 |  |  | $ | 207,000 |  |  | $ | 1,137,212,000 |  |  | $ | 1,137,419,000 |  |  | $ | 155,000 |
Vacant land, land development, and residential construction |  |  | 13,000 |  |  |  | 0 |  |  |  | 0 |  |  |  | 13,000 |  |  |  | 43,226,000 |  |  |  | 43,239,000 |  |  |  | 0 |
Real estate – owner occupied |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 565,758,000 |  |  |  | 565,758,000 |  |  |  | 0 |
Real estate – non-owner occupied |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,027,415,000 |  |  |  | 1,027,415,000 |  |  |  | 0 |
Real estate – multi-family and residential rental |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 176,593,000 |  |  |  | 176,593,000 |  |  |  | 0 |
Total commercial |  |  | 27,000 |  |  |  | 0 |  |  |  | 193,000 |  |  |  | 220,000 |  |  |  | 2,950,204,000 |  |  |  | 2,950,424,000 |  |  |  | 155,000 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity and other |  |  | 132,000 |  |  |  | 2,000 |  |  |  | 20,000 |  |  |  | 154,000 |  |  |  | 60,334,000 |  |  |  | 60,488,000 |  |  |  | 0 |
1-4 family mortgages |  |  | 1,265,000 |  |  |  | 241,000 |  |  |  | 82,000 |  |  |  | 1,588,000 |  |  |  | 440,959,000 |  |  |  | 442,547,000 |  |  |  | 0 |
Total retail |  |  | 1,397,000 |  |  |  | 243,000 |  |  |  | 102,000 |  |  |  | 1,742,000 |  |  |  | 501,293,000 |  |  |  | 503,035,000 |  |  |  | 0 |
Total past due loans |  | $ | 1,424,000 |  |  | $ | 243,000 |  |  | $ | 295,000 |  |  | $ | 1,962,000 |  |  | $ | 3,451,497,000 |  |  | $ | 3,453,459,000 |  |  | $ | 155,000 |
Nonaccrual loans as of March 31, 2022 were as follows:
|  | Recorded |  |  |  |  |
|  | Principal |  |  | Related |
|  | Balance |  |  | Allowance |
With no allowance recorded: |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 0 |  |  | $ | 0 |
Vacant land, land development and residential construction |  |  | 0 |  |  |  | 0 |
Real estate – owner occupied |  |  | 0 |  |  |  | 0 |
Real estate – non-owner occupied |  |  | 0 |  |  |  | 0 |
Real estate – multi-family and residential rental |  |  | 0 |  |  |  | 0 |
Total commercial |  |  | 0 |  |  |  | 0 |
Retail: |  |  |  |  |  |  |  |
1-4 family mortgages |  |  | 1,585,000 |  |  |  | 0 |
Other consumer loans |  |  | 2,000 |  |  |  | 0 |
Total retail |  |  | 1,587,000 |  |  |  | 0 |
Total with no allowance recorded |  | $ | 1,587,000 |  |  | $ | 0 |
With an allowance recorded: |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 0 |  |  | $ | 0 |
Vacant land, land development and residential construction |  |  | 0 |  |  |  | 0 |
Real estate – owner occupied |  |  | 0 |  |  |  | 0 |
Real estate – non-owner occupied |  |  | 0 |  |  |  | 0 |
Real estate – multi-family and residential rental |  |  | 0 |  |  |  | 0 |
Total commercial |  |  | 0 |  |  |  | 0 |
Retail: |  |  |  |  |  |  |  |
1-4 family mortgages |  |  | 25,000 |  |  |  | 25,000 |
Other consumer loans |  |  | 0 |  |  |  | 0 |
Total retail |  |  | 25,000 |  |  |  | 25,000 |
Total with an allowance recorded |  | $ | 25,000 |  |  | $ | 25,000 |
Total nonaccrual loans: |  |  |  |  |  |  |  |
Commercial |  | $ | 0 |  |  | $ | 0 |
Retail |  |  | 1,612,000 |  |  |  | 25,000 |
Total nonaccrual loans |  | $ | 1,612,000 |  |  | $ | 25,000 |
No interest income was recognized on nonaccrual loans during the first quarter of 2022. Lost interest income on nonaccrual loans totaled less than $0.1 million during the first quarter of 2022.
Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. Identified problem loans, which exhibit characteristics (financial or otherwise) that could cause the loans to become nonperforming or require restructuring in the future, are included on an internal watch list. Senior management and the Board of Directors review this list regularly. Market value estimates of collateral on nonaccrual loans, as well as on foreclosed and repossessed assets, are reviewed periodically. We also have a process in place to monitor whether value estimates at each quarter-end are reflective of current market conditions. Our credit policies establish criteria for obtaining appraisals and determining internal value estimates. We may also adjust outside and internal valuations based on identifiable trends within our markets, such as recent sales of similar properties or assets, listing prices and offers received. In addition, we may discount certain appraised and internal value estimates to address distressed market conditions. Under CECL for collateral dependent loans, in instances where the borrower is experiencing financial difficulties, we adopted the practical expedient to measure the allowance based on the fair value of collateral. The allowance is calculated on an individual loan basis based on the shortfall between the fair value of the loan’s collateral and the recorded principal balance. If the fair value of the collateral exceeds the recorded principal balance, no allowance is required. We had no commercial loans on nonaccrual as of March 31, 2022, while nonaccrual retail loans aggregated $1.6 million, a vast majority of which were collateralized by residential property. Nonaccrual loans aggregating $1.5 million had no related specific reserve allocations as of March 31, 2022. Impaired loans as of December 31, 2021, and average impaired loans for the three months ended March 31, 2021, were as follows:
|  |  |  |  |  |  |  |  |  |  |  |  |  | First Quarter |
|  | Unpaid |  |  |  |  |  |  |  |  |  |  | Average |
|  | Contractual |  |  | Recorded |  |  |  |  |  |  | Recorded |
|  | Principal |  |  | Principal |  |  | Related |  |  | Principal |
|  | Balance |  |  | Balance |  |  | Allowance |  |  | Balance |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 2,893,000 |  |  | $ | 2,818,000 |  |  |  |  |  |  | $ | 4,913,000 |
Vacant land, land development and residential construction |  |  | 0 |  |  |  | 0 |  |  |  |  |  |  |  | 0 |
Real estate – owner occupied |  |  | 9,674,000 |  |  |  | 9,674,000 |  |  |  |  |  |  |  | 14,074,000 |
Real estate – non-owner occupied |  |  | 0 |  |  |  | 0 |  |  |  |  |  |  |  | 326,000 |
Real estate – multi-family and residential rental |  |  | 91,000 |  |  |  | 91,000 |  |  |  |  |  |  |  | 0 |
Total commercial |  |  | 12,658,000 |  |  |  | 12,583,000 |  |  |  |  |  |  |  | 19,313,000 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity and other |  |  | 1,173,000 |  |  |  | 1,107,000 |  |  |  |  |  |  |  | 963,000 |
1-4 family mortgages |  |  | 3,166,000 |  |  |  | 2,205,000 |  |  |  |  |  |  |  | 2,550,000 |
Total retail |  |  | 4,339,000 |  |  |  | 3,132,000 |  |  |  |  |  |  |  | 3,513,000 |
Total with no related allowance recorded |  | $ | 16,997,000 |  |  | $ | 15,715,000 |  |  |  |  |  |  | $ | 22,826,000 |
|  |  |  |  |  |  |  |  |  |  |  |  |  | First Quarter |
|  | Unpaid |  |  |  |  |  |  |  |  |  |  | Average |
|  | Contractual |  |  | Recorded |  |  |  |  |  |  | Recorded |
|  | Principal |  |  | Principal |  |  | Related |  |  | Principal |
|  | Balance |  |  | Balance |  |  | Allowance |  |  | Balance |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 2,192,000 |  |  | $ | 2,192,000 |  |  | $ | 266,000 |  |  | $ | 345,000 |
Vacant land, land development and residential construction |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Real estate – owner occupied |  |  | 761,000 |  |  |  | 761,000 |  |  |  | 84,000 |  |  |  | 632,000 |
Real estate – non-owner occupied |  |  | 146,000 |  |  |  | 146,000 |  |  |  | 4,000 |  |  |  | 160,000 |
Real estate – multi-family and residential rental |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total commercial |  |  | 3,099,000 |  |  |  | 3,099,000 |  |  |  | 354,000 |  |  |  | 1,137,000 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity and other |  |  | 160,000 |  |  |  | 140,000 |  |  |  | 123,000 |  |  |  | 267,000 |
1-4 family mortgages |  |  | 412,000 |  |  |  | 412,000 |  |  |  | 69,000 |  |  |  | 665,000 |
Total retail |  |  | 572,000 |  |  |  | 552,000 |  |  |  | 192,000 |  |  |  | 932,000 |
Total with an allowance recorded |  | $ | 3,671,000 |  |  | $ | 3,651,000 |  |  | $ | 546,000 |  |  | $ | 2,069,000 |
Total impaired loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | $ | 15,757,000 |  |  | $ | 15,682,000 |  |  | $ | 354,000 |  |  | $ | 20,450,000 |
Retail |  |  | 4,911,000 |  |  |  | 3,684,000 |  |  |  | 192,000 |  |  |  | 4,445,000 |
Total impaired loans |  | $ | 20,668,000 |  |  | $ | 19,366,000 |  |  | $ | 546,000 |  |  | $ | 24,895,000 |
Impaired loans for which no allocation of the allowance for credit losses has been made generally reflect situations whereby the loans have been charged-down to estimated fair value. Interest income recognized on accruing troubled debt restructurings totaled $0.4 million during the first quarter of 2021. No interest income was recognized on nonaccrual loans during the first quarter of 2021. Lost interest income on nonaccrual loans totaled less than $0.1 million during the first quarter of 2021.
Credit Quality Indicators. We utilize a comprehensive grading system for our commercial loans. All commercial loans are graded on a ten grade rating system. The rating system utilizes standardized grade paradigms that analyze several critical factors such as cash flow, operating performance, financial condition, collateral, industry condition and management. All commercial loans are graded at inception and reviewed and, if appropriate, re-graded at various intervals thereafter. The risk assessment for retail loans is primarily based on the type of collateral. Credit quality indicators were as follows as of March 31, 2022: Commercial credit exposure – credit risk profiled by internal credit risk grades:
|  | Commercial and Industrial |  |  | Commercial Vacant Land, Land Development, and Residential Construction |  |  | Commercial Real Estate - Owner Occupied |  |  | Commercial Real Estate - Non-Owner Occupied |  |  | Commercial Real Estate - Multi-Family and Residential Rental |
Internal credit risk grade groupings: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grades 1 – 4 (1) |  | $ | 719,267,000 |  |  | $ | 34,546,000 |  |  | $ | 358,249,000 |  |  | $ | 497,951,000 |  |  | $ | 132,781,000 |
Grades 5 – 7 |  |  | 415,709,000 |  |  |  | 18,031,000 |  |  |  | 222,095,000 |  |  |  | 496,757,000 |  |  |  | 75,034,000 |
Grades 8 – 9 |  |  | 18,838,000 |  |  |  | 116,000 |  |  |  | 2,388,000 |  |  |  | 12,653,000 |  |  |  | 147,000 |
Total commercial |  | $ | 1,153,814,000 |  |  | $ | 52,693,000 |  |  | $ | 582,732,000 |  |  | $ | 1,007,361,000 |  |  | $ | 207,962,000 |
Retail credit exposure – credit risk profiled by collateral type:
|  | Retail |  |  | Retail |
|  | 1-4 Family |  |  | Other Consumer |
|  | Mortgages |  |  | Loans |
Performing |  | $ | 520,946,000 |  |  | $ | 28,670,000 |
Nonperforming |  |  | 1,610,000 |  |  |  | 2,000 |
Total retail |  | $ | 522,556,000 |  |  | $ | 28,672,000 |
| (1) | Included in Commercial and Industrial Loans Grades 1 – 4 are $12.2 million of loans originated under the Paycheck Protection Program.
Credit quality indicators were as follows as of December 31, 2021: Commercial credit exposure – credit risk profiled by internal credit risk grades:
|  | Commercial and Industrial |  |  | Commercial Vacant Land, Land Development, and Residential Construction |  |  | Commercial Real Estate - Owner Occupied |  |  | Commercial Real Estate - Non-Owner Occupied |  |  | Commercial Real Estate - Multi-Family and Residential Rental |
Internal credit risk grade groupings: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grades 1 – 4 (1) |  | $ | 729,224,000 |  |  | $ | 28,390,000 |  |  | $ | 346,082,000 |  |  | $ | 503,482,000 |  |  | $ | 119,473,000 |
Grades 5 – 7 |  |  | 398,378,000 |  |  |  | 14,730,000 |  |  |  | 208,060,000 |  |  |  | 511,280,000 |  |  |  | 56,968,000 |
Grades 8 – 9 |  |  | 9,817,000 |  |  |  | 119,000 |  |  |  | 11,616,000 |  |  |  | 12,653,000 |  |  |  | 152,000 |
Total commercial |  | $ | 1,137,419,000 |  |  | $ | 43,239,000 |  |  | $ | 565,758,000 |  |  | $ | 1,027,415,000 |  |  | $ | 176,593,000 |
Retail credit exposure – credit risk profiled by collateral type:
|  | Retail |  |  | Retail |
|  | Home Equity |  |  | 1-4 Family |
|  | and Other |  |  | Mortgages |
Performing |  | $ | 60,369,000 |  |  | $ | 440,861,000 |
Nonperforming |  |  | 119,000 |  |  |  | 1,686,000 |
Total retail |  | $ | 60,488,000 |  |  | $ | 442,547,000 |
| (1) | Included in Commercial and Industrial Loans Grades 1 – 4 are $40.1 million of loans originated under the Paycheck Protection Program.
| All commercial loans are graded using the following criteria:
| Grade 1. | “Exceptional” Loans with this rating contain very little, if any, risk.
| Grade 2. | “Outstanding” Loans with this rating have excellent and stable sources of repayment and conform to bank policy and regulatory requirements.
| Grade 3. | “Very Good” Loans with this rating have strong sources of repayment and conform to bank policy and regulatory requirements. These are loans for which repayment risks are acceptable.
| Grade 4. | “Good” Loans with this rating have solid sources of repayment and conform to bank policy and regulatory requirements. These are loans for which repayment risks are modest.
| Grade 5. | “Acceptable” Loans with this rating exhibit acceptable sources of repayment and conform with most bank policies and all regulatory requirements. These are for loans for which repayment risks are satisfactory.
| Grade 6. | “Monitor” Loans with this rating are considered to have emerging weaknesses which may include negative current cash flow, high leverage, or operating losses. Generally, if further deterioration is observed, these credits will be downgraded to the criticized asset report.
| Grade 7. | “Special Mention” Loans with this rating have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan at some future date.
| Grade 8. | “Substandard” Loans with this rate are inadequately protected by current sound net worth, paying capacity of the obligor, or of the pledged collateral, if any. A Substandard loan normally has one or more well-defined weaknesses that jeopardize the repayment of the debt. They are characterized by the distinct possibility of loss if the deficiencies are not corrected.
| Grade 9. | “Doubtful” Loans with this rating exhibit all the weaknesses inherent in the Substandard classification and where collection or liquidation in full is highly questionable and improbable.
| Grade 10. | “Loss” Loans with this rating are considered uncollectible, and of such little value that continuance as an active asset is not warranted.
| The primary risk elements with respect to commercial loans are the financial condition of the borrower, the sufficiency of collateral, and timeliness of scheduled payments. We have a policy of requesting and reviewing periodic financial statements from commercial loan customers and employ a disciplined and formalized review of the existence of collateral and its value. The primary risk element with respect to each residential real estate loan and consumer loan is the timeliness of scheduled payments. We have a reporting system that monitors past due loans and have adopted policies to pursue creditors’ rights in order to preserve our collateral position.
The following table reflects loan balances as of March 31, 2022 based on year of origination (dollars in thousands):
|  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | 2018 |  |  | Prior |  |  | Term Total |  |  | Revolving Loans |  |  | Grand Total |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and Industrial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grades 1 – 4 |  | $ | 23,869 |  |  | $ | 215,466 |  |  | $ | 59,456 |  |  | $ | 14,728 |  |  | $ | 4,966 |  |  | $ | 11,888 |  |  | $ | 330,373 |  |  | $ | 388,894 |  |  | $ | 719,267 |
Grades 5 – 7 |  |  | 27,468 |  |  |  | 148,260 |  |  |  | 73,905 |  |  |  | 10,949 |  |  |  | 2,874 |  |  |  | 850 |  |  |  | 264,306 |  |  |  | 151,403 |  |  |  | 415,709 |
Grades 8 – 9 |  |  | 3,673 |  |  |  | 4,716 |  |  |  | 87 |  |  |  | 0 |  |  |  | 60 |  |  |  | 56 |  |  |  | 8,592 |  |  |  | 10,246 |  |  |  | 18,838 |
Total |  | $ | 55,010 |  |  | $ | 368,442 |  |  | $ | 133,448 |  |  | $ | 25,677 |  |  | $ | 7,900 |  |  | $ | 12,794 |  |  | $ | 603,271 |  |  | $ | 550,543 |  |  | $ | 1,153,814 |
Vacant Land, Land Development and Residential Construction: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grades 1 – 4 |  | $ | 7,651 |  |  | $ | 21,988 |  |  | $ | 4,099 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 453 |  |  | $ | 34,191 |  |  | $ | 355 |  |  | $ | 34,546 |
Grades 5 – 7 |  |  | 4,017 |  |  |  | 12,444 |  |  |  | 438 |  |  |  | 116 |  |  |  | 0 |  |  |  | 842 |  |  |  | 17,857 |  |  |  | 174 |  |  |  | 18,031 |
Grades 8 – 9 |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 17 |  |  |  | 99 |  |  |  | 116 |  |  |  | 0 |  |  |  | 116 |
Total |  | $ | 11,668 |  |  | $ | 34,432 |  |  | $ | 4,537 |  |  | $ | 116 |  |  | $ | 17 |  |  | $ | 1,394 |  |  | $ | 52,164 |  |  | $ | 529 |  |  | $ | 52,693 |
Real Estate – Owner Occupied: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grades 1 – 4 |  | $ | 51,926 |  |  | $ | 186,183 |  |  | $ | 64,960 |  |  | $ | 22,202 |  |  | $ | 18,739 |  |  | $ | 14,239 |  |  | $ | 358,249 |  |  | $ | 0 |  |  | $ | 358,249 |
Grades 5 – 7 |  |  | 50,222 |  |  |  | 87,685 |  |  |  | 46,255 |  |  |  | 12,241 |  |  |  | 16,595 |  |  |  | 9,097 |  |  |  | 222,095 |  |  |  | 0 |  |  |  | 222,095 |
Grades 8 – 9 |  |  | 0 |  |  |  | 0 |  |  |  | 48 |  |  |  | 2,171 |  |  |  | 169 |  |  |  | 0 |  |  |  | 2,388 |  |  |  | 0 |  |  |  | 2,388 |
Total |  | $ | 102,148 |  |  | $ | 273,868 |  |  | $ | 111,263 |  |  | $ | 36,614 |  |  | $ | 35,503 |  |  | $ | 23,336 |  |  | $ | 582,732 |  |  | $ | 0 |  |  | $ | 582,732 |
Real Estate – Non-Owner Occupied: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grades 1 – 4 |  | $ | 40,445 |  |  | $ | 199,956 |  |  | $ | 146,664 |  |  | $ | 71,923 |  |  | $ | 21,200 |  |  | $ | 17,763 |  |  | $ | 497,951 |  |  | $ | 0 |  |  | $ | 497,951 |
Grades 5 – 7 |  |  | 35,131 |  |  |  | 193,821 |  |  |  | 162,866 |  |  |  | 39,685 |  |  |  | 15,924 |  |  |  | 49,330 |  |  |  | 496,757 |  |  |  | 0 |  |  |  | 496,757 |
Grades 8 – 9 |  |  | 0 |  |  |  | 12,653 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 12,653 |  |  |  | 0 |  |  |  | 12,653 |
Total |  | $ | 75,576 |  |  | $ | 406,430 |  |  | $ | 309,530 |  |  | $ | 111,608 |  |  | $ | 37,124 |  |  | $ | 67,093 |  |  | $ | 1,007,361 |  |  | $ | 0 |  |  | $ | 1,007,361 |
Real Estate – Multi-Family and Residential Rental: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grades 1 – 4 |  | $ | 20,158 |  |  | $ | 59,645 |  |  | $ | 38,770 |  |  | $ | 5,905 |  |  | $ | 3,165 |  |  | $ | 5,138 |  |  | $ | 132,781 |  |  | $ | 0 |  |  | $ | 132,781 |
Grades 5 – 7 |  |  | 17,570 |  |  |  | 32,757 |  |  |  | 15,146 |  |  |  | 3,992 |  |  |  | 3,714 |  |  |  | 1,855 |  |  |  | 75,034 |  |  |  | 0 |  |  |  | 75,034 |
Grades 8 – 9 |  |  | 0 |  |  |  | 89 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 58 |  |  |  | 147 |  |  |  | 0 |  |  |  | 147 |
Total |  | $ | 37,728 |  |  | $ | 92,491 |  |  | $ | 53,916 |  |  | $ | 9,897 |  |  | $ | 6,879 |  |  | $ | 7,051 |  |  | $ | 207,962 |  |  | $ | 0 |  |  | $ | 207,962 |
Total Commercial |  | $ | 282,130 |  |  | $ | 1,175,663 |  |  | $ | 612,694 |  |  | $ | 183,912 |  |  | $ | 87,423 |  |  | $ | 111,668 |  |  | $ | 2,453,490 |  |  | $ | 551,072 |  |  | $ | 3,004,562 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 Family Mortgages |  | $ | 67,861 |  |  | $ | 235,895 |  |  | $ | 101,123 |  |  | $ | 16,365 |  |  | $ | 17,173 |  |  | $ | 52,618 |  |  | $ | 491,035 |  |  | $ | 31,521 |  |  | $ | 522,556 |
Other Consumer Loans |  |  | 1,261 |  |  |  | 4,369 |  |  |  | 1,915 |  |  |  | 1,892 |  |  |  | 807 |  |  |  | 935 |  |  |  | 11,179 |  |  |  | 17,493 |  |  |  | 28,672 |
Total Retail |  | $ | 69,122 |  |  | $ | 240,264 |  |  | $ | 103,038 |  |  | $ | 18,257 |  |  | $ | 17,980 |  |  | $ | 53,553 |  |  | $ | 502,214 |  |  | $ | 49,014 |  |  | $ | 551,228 |
Grand Total |  | $ | 351,252 |  |  | $ | 1,415,927 |  |  | $ | 715,732 |  |  | $ | 202,169 |  |  | $ | 105,403 |  |  | $ | 165,221 |  |  | $ | 2,955,704 |  |  | $ | 600,086 |  |  | $ | 3,555,790 |
Activity in the allowance for credit losses during the three months ended March 31, 2022 are as follows (dollars in thousands):
|  | Commercial and industrial |  |  | Commercial vacant land, land development and residential construction |  |  | Commercial real estate – owner occupied |  |  | Commercial real estate – non-owner occupied |  |  | Commercial real estate – multi-family and residential rental |  |  | 1-4 family mortgages |  |  | Other consumer loans |  |  | Unallocated |  |  | Total |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 10,782 |  |  | $ | 420 |  |  | $ | 6,045 |  |  | $ | 13,301 |  |  | $ | 1,695 |  |  | $ | 2,449 |  |  | $ | 626 |  |  | $ | 45 |  |  | $ | 35,363 |
Adoption of ASU 2016-13 |  |  | (1,571 | ) |  |  | (43 | ) |  |  | (560 | ) |  |  | (2,534 | ) |  |  | (621 | ) |  |  | 5,395 |  |  |  | (411 | ) |  |  | (55 | ) |  |  | (400 | )
Provision for credit losses |  |  | (742 | ) |  |  | 106 |  |  |  | 286 |  |  |  | (445 | ) |  |  | 194 |  |  |  | 593 |  |  |  | (33 | ) |  |  | 141 |  |  |  | 100 |
Charge-offs |  |  | (170 | ) |  |  | (29 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (2 | ) |  |  | (4 | ) |  |  | 0 |  |  |  | (205 | )
Recoveries |  |  | 114 |  |  |  | 1 |  |  |  | 32 |  |  |  | 0 |  |  |  | 8 |  |  |  | 127 |  |  |  | 13 |  |  |  | 0 |  |  |  | 295 |
Ending balance |  | $ | 8,413 |  |  | $ | 455 |  |  | $ | 5,803 |  |  | $ | 10,322 |  |  | $ | 1,276 |  |  | $ | 8,562 |  |  | $ | 191 |  |  | $ | 131 |  |  | $ | 35,153 |
Activity in the allowance for loan losses for loans during the three months ended March 31, 2021 and the recorded investments in loans as of December 31, 2021 are as follows (dollars in thousands):
|  | Commercial and industrial |  |  | Commercial vacant land, land development and residential construction |  |  | Commercial real estate – owner occupied |  |  | Commercial real estate – non-owner occupied |  |  | Commercial real estate – multi-family and residential rental |  |  | Home equity and other |  |  | 1–4 family mortgages |  |  | Unallocated |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 9,424 |  |  | $ | 679 |  |  | $ | 8,246 |  |  | $ | 13,611 |  |  | $ | 1,819 |  |  | $ | 889 |  |  | $ | 3,240 |  |  | $ | 59 |  |  | $ | 37,967 |
Provision for loan losses |  |  | 583 |  |  |  | 40 |  |  |  | (181 | ) |  |  | 140 |  |  |  | 6 |  |  |  | (82 | ) |  |  | (337 | ) |  |  | 131 |  |  |  | 300 |
Charge-offs |  |  | 0 |  |  |  | (15 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (4 | ) |  |  | (33 | ) |  |  | 0 |  |  |  | (52 | )
Recoveries |  |  | 104 |  |  |  | 16 |  |  |  | 239 |  |  |  | 0 |  |  |  | 0 |  |  |  | 38 |  |  |  | 83 |  |  |  | 0 |  |  |  | 480 |
Ending balance |  | $ | 10,111 |  |  | $ | 720 |  |  | $ | 8,304 |  |  | $ | 13,751 |  |  | $ | 1,825 |  |  | $ | 841 |  |  | $ | 2,953 |  |  | $ | 190 |  |  | $ | 38,695 |
Ending balance: individually evaluated for impairment |  | $ | 62 |  |  | $ | 0 |  |  | $ | 47 |  |  | $ | 7 |  |  | $ | 0 |  |  | $ | 230 |  |  | $ | 141 |  |  | $ | 0 |  |  | $ | 487 |
Ending balance: collectively evaluated for impairment |  | $ | 10,049 |  |  | $ | 720 |  |  | $ | 8,257 |  |  | $ | 13,744 |  |  | $ | 1,825 |  |  | $ | 611 |  |  | $ | 2,812 |  |  | $ | 190 |  |  | $ | 38,208 |
Total loans (*): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance |  | $ | 1,097,309 |  |  | $ | 43,239 |  |  | $ | 565,758 |  |  | $ | 1,027,415 |  |  | $ | 176,593 |  |  | $ | 60,488 |  |  | $ | 442,547 |  |  |  |  |  |  | $ | 3,413,349 |
Ending balance: individually evaluated for impairment |  | $ | 5,010 |  |  | $ | 0 |  |  | $ | 10,435 |  |  | $ | 146 |  |  | $ | 91 |  |  | $ | 1,247 |  |  | $ | 2,437 |  |  |  |  |  |  | $ | 19,366 |
Ending balance: collectively evaluated for impairment |  | $ | 1,092,299 |  |  | $ | 43,239 |  |  | $ | 555,323 |  |  | $ | 1,027,269 |  |  | $ | 176,502 |  |  | $ | 59,241 |  |  | $ | 440,110 |  |  |  |  |  |  | $ | 3,393,983 |
(*) Excludes $40.1 million in loans originated under the Paycheck Protection Program.
Loans modified as troubled debt restructurings during the three months ended March 31, 2022 were as follows:
|  |  |  |  |  | Pre- |  |  | Post- |
|  |  |  |  |  | Modification |  |  | Modification |
|  |  |  |  |  | Recorded |  |  | Recorded |
|  | Number of |  |  | Principal |  |  | Principal |
|  | Contracts |  |  | Balance |  |  | Balance |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 0 |  |  | $ | 0 |  |  | $ | 0 |
Vacant land, land development and residential construction |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Real estate – owner occupied |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Real estate – non-owner occupied |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Real estate – multi-family and residential rental |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total commercial |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |
1-4 family mortgages |  |  | 2 |  |  |  | 128,000 |  |  |  | 128,000 |
Other consumer loans |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total retail |  |  | 2 |  |  |  | 128,000 |  |  |  | 128,000 |
Total loans |  |  | 2 |  |  | $ | 128,000 |  |  | $ | 128,000 |
Loans modified as troubled debt restructurings during the three months ended March 31, 2021 were as follows:
|  |  |  |  |  | Pre- |  |  | Post- |
|  |  |  |  |  | Modification |  |  | Modification |
|  |  |  |  |  | Recorded |  |  | Recorded |
|  | Number of |  |  | Principal |  |  | Principal |
|  | Contracts |  |  | Balance |  |  | Balance |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 1 |  |  | $ | 23,000 |  |  | $ | 22,000 |
Vacant land, land development and residential construction |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Real estate – owner occupied |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Real estate – non-owner occupied |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Real estate – multi-family and residential rental |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total commercial |  |  | 1 |  |  |  | 23,000 |  |  |  | 22,000 |
Retail: |  |  |  |  |  |  |  |  |  |  |  |
Home equity and other |  |  | 1 |  |  |  | 71,000 |  |  |  | 71,000 |
1-4 family mortgages |  |  | 1 |  |  |  | 36,000 |  |  |  | 36,000 |
Total retail |  |  | 2 |  |  |  | 107,000 |  |  |  | 107,000 |
Total loans |  |  | 3 |  |  | $ | 130,000 |  |  | $ | 129,000 |
The following loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due within the three months ended March 31, 2022 (amounts as of period end):
|  |  |  |  |  | Recorded |
|  | Number of |  |  | Principal |
|  | Contracts |  |  | Balance |
Commercial: |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 0 |  |  | $ | 0 |
Vacant land, land development and residential construction |  |  | 0 |  |  |  | 0 |
Real estate – owner occupied |  |  | 0 |  |  |  | 0 |
Real estate – non-owner occupied |  |  | 0 |  |  |  | 0 |
Real estate – multi-family and residential rental |  |  | 0 |  |  |  | 0 |
Total commercial |  |  | 0 |  |  |  | 0 |
Retail: |  |  |  |  |  |  |  |
1-4 family mortgages |  |  | 0 |  |  |  | 0 |
Other consumer loans |  |  | 0 |  |  |  | 0 |
Total retail |  |  | 0 |  |  |  | 0 |
Total |  |  | 0 |  |  | $ | 0 |
The following loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due within the three months ended March 31, 2021 (amounts as of period end):
|  |  |  |  |  | Recorded |
|  | Number of |  |  | Principal |
|  | Contracts |  |  | Balance |
Commercial: |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 2 |  |  | $ | 593,000 |
Vacant land, land development and residential construction |  |  | 0 |  |  |  | 0 |
Real estate – owner occupied |  |  | 0 |  |  |  | 0 |
Real estate – non-owner occupied |  |  | 0 |  |  |  | 0 |
Real estate – multi-family and residential rental |  |  | 0 |  |  |  | 0 |
Total commercial |  |  | 2 |  |  |  | 593,000 |
Retail: |  |  |  |  |  |  |  |
Home equity and other |  |  | 0 |  |  |  | 0 |
1-4 family mortgages |  |  | 1 |  |  |  | 6,000 |
Total retail |  |  | 1 |  |  |  | 6,000 |
Total |  |  | 3 |  |  | $ | 599,000 |
Activity for loans categorized as troubled debt restructurings during the three months ended March 31, 2022 is as follows:
|  | Commercial and Industrial |  |  | Commercial Vacant Land, Land Development, and Residential Construction |  |  | Commercial Real Estate - Owner Occupied |  |  | Commercial Real Estate - Non-Owner Occupied |  |  | Commercial Real Estate - Multi-Family and Residential Rental |
Commercial Loan Portfolio: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance |  | $ | 4,973,000 |  |  | $ | 0 |  |  | $ | 10,435,000 |  |  | $ | 146,000 |  |  | $ | 91,000 |
Charge-Offs |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Payments |  |  | (212,000 | ) |  |  | 0 |  |  |  | (9,677,000 | ) |  |  | (3,000 | ) |  |  | (1,000 | )
Transfers to ORE |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Net Additions/Deletions |  |  | (1,932,000 | ) |  |  | 0 |  |  |  | (669,000 | ) |  |  | 0 |  |  |  | 0 |
Ending Balance |  | $ | 2,829,000 |  |  | $ | 0 |  |  | $ | 89,000 |  |  | $ | 143,000 |  |  | $ | 90,000 |
|  | Retail |  |  | Retail |
|  | 1-4 Family |  |  | Other Consumer |
|  | Mortgages |  |  | Loans |
Retail Loan Portfolio: |  |  |  |  |  |  |  |
Beginning Balance |  | $ | 627,000 |  |  | $ | 1,202,000 |
Charge-Offs |  |  | 0 |  |  |  | 0 |
Payments |  |  | (78,000 | ) |  |  | (2,000 | )
Transfers to ORE |  |  | 0 |  |  |  | 0 |
Net Additions/Deletions (1) |  |  | 1,797,000 |  |  |  | (1,187,000 | )
Ending Balance |  | $ | 2,346,000 |  |  | $ | 13,000 |
| (1) | Includes $1.2 million in the transfer of home equity lines of credit from other consumer loans to 1-4 family mortgages in association with the adoption of the CECL methodology effective January 1, 2022.
Activity for loans categorized as troubled debt restructurings during the three months ended March 31, 2021 is as follows:
|  | Commercial and Industrial |  |  | Commercial Vacant Land, Land Development, and Residential Construction |  |  | Commercial Real Estate - Owner Occupied |  |  | Commercial Real Estate - Non-Owner Occupied |  |  | Commercial Real Estate - Multi-Family and Residential Rental |
Commercial Loan Portfolio: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance |  | $ | 6,414,000 |  |  | $ | 0 |  |  | $ | 14,797,000 |  |  | $ | 480,000 |  |  | $ | 0 |
Charge-Offs |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Payments |  |  | (2,676,000 | ) |  |  | 0 |  |  |  | (910,000 | ) |  |  | (9,000 | ) |  |  | 0 |
Transfers to ORE |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Net Additions/Deletions |  |  | 22,000 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Ending Balance |  | $ | 3,760,000 |  |  | $ | 0 |  |  | $ | 13,887,000 |  |  | $ | 471,000 |  |  | $ | 0 |
|  | Retail |  |  | Retail |
|  | Home Equity |  |  | 1-4 Family |
|  | and Other |  |  | Mortgages |
Retail Loan Portfolio: |  |  |  |  |  |  |  |
Beginning Balance |  | $ | 1,146,000 |  |  | $ | 806,000 |
Charge-Offs |  |  | 0 |  |  |  | 0 |
Payments |  |  | (118,000 | ) |  |  | (22,000 | )
Transfers to ORE |  |  | 0 |  |  |  | 0 |
Net Additions/Deletions |  |  | 71,000 |  |  |  | 36,000 |
Ending Balance |  | $ | 1,099,000 |  |  | $ | 820,000 |

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- References No definition available. + Details
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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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