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Note 3 - Loans and Allowance for Credit Losses

3 Months Ended

Mar. 31, 2022

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