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Loans and Allowance for Credit Losses on Loans
 6 Months Ended
Jun. 30, 2024
Receivables [Abstract]  
Loans and Allowance for Credit Losses on Loans Loans and Allowance for Credit Losses on Loans
Loans consist of the following at the dates indicated(1):
June 30, 2024December 31, 2023
Commercial real estate loans
Construction and land development$316,050 $305,269 
Commercial real estate – owner occupied545,631 536,545 
Commercial real estate – non-owner occupied892,653 875,694 
Multifamily92,292 88,623 
Total commercial real estate loans1,846,626 1,806,131 
Commercial loans
Commercial and industrial266,136 237,255 
Equipment finance461,010 465,573 
Municipal leases152,509 150,292 
Total commercial loans879,655 853,120 
Residential real estate loans
Construction and land development70,679 96,646 
One-to-four family621,196 584,405 
HELOCs188,465 185,878 
Total residential real estate loans880,340 866,929 
Consumer loans94,833 113,842 
Total loans, net of deferred loan fees and costs3,701,454 3,640,022 
ACL on loans(49,223)(48,641)
Loans, net$3,652,231 $3,591,381 
(1)    At June 30, 2024 and December 31, 2023 accrued interest receivable of $17,680 and $16,218, respectively, was accounted for separately from the amortized cost basis.
All qualifying one-to-four family loans, HELOCs, commercial real estate loans and FHLB of Atlanta stock are pledged as collateral by a blanket pledge to secure outstanding FHLB advances.
Loans are made to the Company's executive officers, directors and their associates during the ordinary course of business. The aggregate amount of loans to such related parties totaled approximately $0 and $209 at June 30, 2024 and December 31, 2023, respectively. In relation to these loans are unfunded commitments that totaled approximately $3 at both June 30, 2024 and December 31, 2023, respectively.
Loans are monitored for credit quality on a recurring basis and the composition of the loans outstanding by credit quality indicator is provided below. Loan credit quality indicators are developed through review of individual borrowers on an ongoing basis. Generally, loans are monitored for performance on a quarterly basis with the credit quality indicators adjusted as needed. The indicators represent the rating for loans as of the date presented based on the most recent assessment performed. These credit quality indicators are defined as follows:
Pass – A pass rated loan is not adversely classified because it does not display any of the characteristics for adverse classification.
Special Mention – A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention loans are not adversely classified and do not warrant adverse classification.
Substandard – A substandard loan is inadequately protected by the current net worth and paying capacity of the obligor, or of the collateral pledged, if any. Loans classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These loans are characterized by the distinct possibility of loss if the deficiencies are not corrected.
Doubtful – A loan classified as doubtful has all the weaknesses inherent in a loan classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions and values.
Loss – Loans classified as loss are considered uncollectible and of such little value that their continuing to be carried as a loan is not warranted. This classification is not necessarily equivalent to no potential for recovery or salvage value, but rather that it is not appropriate to defer a full write-off even though partial recovery may be effected in the future.
The following tables present the credit risk profile by risk grade for commercial real estate, commercial, residential real estate and consumer loans by origination year as of June 30, 2024. Also included in the tables detailing loan balances are gross charge-offs for the six months ended June 30, 2024.
Term Loans By Origination Fiscal Year
June 30, 20242024
2023-S(1)
202320222021PriorRevolvingTotal
Construction and land development
Risk rating
Pass$56,198 $70,258 $73,421 $63,005 $37,351 $7,204 $7,400 $314,837 
Special mention— — — — 1,213 — — 1,213 
Substandard— — — — — — — — 
Doubtful
— — — — — — — — 
Loss— — — — — — — — 
Total construction and land development$56,198 $70,258 $73,421 $63,005 $38,564 $7,204 $7,400 $316,050 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
Commercial real estate – owner occupied
Risk rating
Pass$30,692 $36,172 $68,222 $100,914 $85,955 $212,990 $4,539 $539,484 
Special mention— — 151 135 443 2,267 — 2,996 
Substandard— — 259 664 1 2,019 — 2,943 
Doubtful— — — — — 208 — 208 
Loss— — — — — — — — 
Total commercial real estate – owner occupied$30,692 $36,172 $68,632 $101,713 $86,399 $217,484 $4,539 $545,631 
Current period gross charge-offs$— $— $— $— $— $208 $— $208 
Commercial real estate – non-owner occupied
Risk rating
Pass$39,889 $13,541 $100,512 $153,417 $182,268 $358,719 $8,471 $856,817 
Special mention— — 3,680 3,846 — 15,261 — 22,787 
Substandard— — 3,078 — — 9,971 — 13,049 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total commercial real estate – non-owner occupied$39,889 $13,541 $107,270 $157,263 $182,268 $383,951 $8,471 $892,653 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
Multifamily
Risk rating
Pass$9,569 $5,508 $6,605 $19,613 $20,940 $29,707 $— $91,942 
Special mention— — — — — 88 — 88 
Substandard— — — — — 262 — 262 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total multifamily$9,569 $5,508 $6,605 $19,613 $20,940 $30,057 $— $92,292 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
Total commercial real estate
Risk rating
Pass$136,348 $125,479 $248,760 $336,949 $326,514 $608,620 $20,410 $1,803,080 
Special mention— — 3,831 3,981 1,656 17,616 — 27,084 
Substandard— — 3,337 664 1 12,252 — 16,254 
Doubtful— — — — — 208 — 208 
Loss— — — — — — — — 
Total commercial real estate$136,348 $125,479 $255,928 $341,594 $328,171 $638,696 $20,410 $1,846,626 
Total current period gross charge-offs$— $— $— $— $— $208 $— $208 
(1)As previously announced, on July 24, 2023, the Board of Directors approved a change in the Company's fiscal year end from June 30 to December 31. "2023-S" represents the six-month transition period ended December 31, 2023. All subsequent periods are based on a calendar year end.
Term Loans By Origination Fiscal Year
June 30, 20242024
2023-S(1)
202320222021PriorRevolvingTotal
Commercial and industrial
Risk rating
Pass$28,093 $24,073 $45,428 $39,842 $12,002 $26,227 $80,820 $256,485 
Special mention— — 380 473 116 2,247 163 3,379 
Substandard— 279 1,077 1,333 426 1,335 24 4,474 
Doubtful
— — 895 — — 494 100 1,489 
Loss— — — 178 — 131 — 309 
Total commercial and industrial$28,093 $24,352 $47,780 $41,826 $12,544 $30,434 $81,107 $266,136 
Current period gross charge-offs$— $— $527 $480 $51 $260 $— $1,318 
Equipment finance
Risk rating
Pass$75,551 $75,982 $148,323 $87,970 $41,286 $18,421 $— $447,533 
Special mention— 99 871 1,035 555 317 — 2,877 
Substandard— — — 3,058 — 119 — 3,177 
Doubtful— 135 3,248 3,198 715 127 — 7,423 
Loss— — — — — — — — 
Total equipment finance$75,551 $76,216 $152,442 $95,261 $42,556 $18,984 $— $461,010 
Current period gross charge-offs$— $— $1,640 $1,259 $347 $244 $— $3,490 
Municipal leases
Risk rating
Pass$4,719 $20,024 $26,196 $23,824 $25,827 $51,919 $— $152,509 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total municipal leases$4,719 $20,024 $26,196 $23,824 $25,827 $51,919 $— $152,509 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
Total commercial
Risk rating
Pass$108,363 $120,079 $219,947 $151,636 $79,115 $96,567 $80,820 $856,527 
Special mention— 99 1,251 1,508 671 2,564 163 6,256 
Substandard— 279 1,077 4,391 426 1,454 24 7,651 
Doubtful— 135 4,143 3,198 715 621 100 8,912 
Loss— — — 178 — 131 — 309 
Total commercial$108,363 $120,592 $226,418 $160,911 $80,927 $101,337 $81,107 $879,655 
Total current period gross charge-offs$— $— $2,167 $1,739 $398 $504 $— $4,808 
Term Loans By Origination Fiscal Year
June 30, 20242024
2023-S(1)
202320222021PriorRevolvingTotal
Construction and land development
Risk rating
Pass$4,531 $17,120 $32,613 $12,598 $2,974 $708 $— $70,544 
Special mention— — — — — — — — 
Substandard— — — — — 135 — 135 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total construction and land development$4,531 $17,120 $32,613 $12,598 $2,974 $843 $— $70,679 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
One-to-four family
Risk rating
Pass$21,318 $19,025 $138,684 $151,406 $105,441 $169,107 $10,696 $615,677 
Special mention— — — — — 350 — 350 
Substandard— — 605 255 — 4,293 — 5,153 
Doubtful— — — — — 16 — 16 
Loss— — — — — — — — 
Total one-to-four family$21,318 $19,025 $139,289 $151,661 $105,441 $173,766 $10,696 $621,196 
Current period gross charge-offs$— $— $— $7 $— $5 $— $12 
HELOCs
Risk rating
Pass$— $— $— $— $— $— $185,642 $185,642 
Special mention— — — — — — — — 
Substandard— — — — — — 2,823 2,823 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total HELOCs$— $— $— $— $— $— $188,465 $188,465 
Current period gross charge-offs$— $— $— $— $— $— $48 $48 
Total residential real estate
Risk rating
Pass$25,849 $36,145 $171,297 $164,004 $108,415 $169,815 $196,338 $871,863 
Special mention— — — — — 350 — 350 
Substandard— — 605 255 — 4,428 2,823 8,111 
Doubtful— — — — — 16 — 16 
Loss— — — — — — — — 
Total residential real estate$25,849 $36,145 $171,902 $164,259 $108,415 $174,609 $199,161 $880,340 
Total current period gross charge-offs$— $— $— $7 $— $5 $48 $60 
Term Loans By Origination Fiscal Year
June 30, 20242024
2023-S(1)
202320222021PriorRevolvingTotal
Total consumer
Risk rating
Pass$4,537 $22,478 $41,888 $11,317 $7,403 $5,735 $244 $93,602 
Special mention— — — — — — — — 
Substandard108 126 483 135 148 205 19 1,224 
Doubtful— — 4 — 3 — — 7 
Loss— — — — — — — — 
Total consumer$4,645 $22,604 $42,375 $11,452 $7,554 $5,940 $263 $94,833 
Total current period gross charge-offs$6 $85 $268 $189 $66 $35 $2 $651 
The following tables present the credit risk profile by risk grade for commercial real estate, commercial, residential real estate and consumer loans by origination year as of December 31, 2023(2). Also included in the tables detailing loan balances are gross charge-offs for the year ended December 31, 2023.
Term Loans By Origination Fiscal Year
December 31, 2023
2023-S(1)
2023202220212020PriorRevolvingTotal
Construction and land development
Risk rating
Pass$61,716 $105,170 $88,320 $37,197 $201 $7,581 $4,805 $304,990 
Special mention— — — — — — — — 
Substandard— — 279 — — — — 279 
Doubtful
— — — — — — — — 
Loss— — — — — — — — 
Total construction and land development$61,716 $105,170 $88,599 $37,197 $201 $7,581 $4,805 $305,269 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
Commercial real estate – owner occupied
Risk rating
Pass$35,428 $61,090 $104,005 $90,506 $72,121 $159,328 $3,486 $525,964 
Special mention— 149 148 447 2,033 3,699 — 6,476 
Substandard— — 379 1 338 2,886 — 3,604 
Doubtful— — — — 289 212 — 501 
Loss— — — — — — — — 
Total commercial real estate – owner occupied$35,428 $61,239 $104,532 $90,954 $74,781 $166,125 $3,486 $536,545 
Current period gross charge-offs$— $— $— $— $— $290 $— $290 
Commercial real estate – non-owner occupied
Risk rating
Pass$11,716 $104,881 $155,782 $185,264 $95,749 $302,341 $6,460 $862,193 
Special mention— — — — — 294 — 294 
Substandard— 3,078 — — 6,180 3,949 — 13,207 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total commercial real estate – non-owner occupied$11,716 $107,959 $155,782 $185,264 $101,929 $306,584 $6,460 $875,694 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
Multifamily
Risk rating
Pass$5,515 $4,184 $18,597 $21,411 $10,921 $25,400 $644 $86,672 
Special mention— — 1,583 — — 89 — 1,672 
Substandard— — — — — 279 — 279 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total multifamily$5,515 $4,184 $20,180 $21,411 $10,921 $25,768 $644 $88,623 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
Total commercial real estate
Risk rating
Pass$114,375 $275,325 $366,704 $334,378 $178,992 $494,650 $15,395 $1,779,819 
Special mention— 149 1,731 447 2,033 4,082 — 8,442 
Substandard— 3,078 658 1 6,518 7,114 — 17,369 
Doubtful— — — — 289 212 — 501 
Loss— — — — — — — — 
Total commercial real estate$114,375 $278,552 $369,093 $334,826 $187,832 $506,058 $15,395 $1,806,131 
Total current period gross charge-offs$— $— $— $— $— $290 $— $290 
(1)As previously announced, on July 24, 2023, the Board of Directors approved a change in the Company's fiscal year end from June 30 to December 31. "2023-S" represents the six-month transition period ended December 31, 2023. All subsequent periods are based on a calendar year end.
(2)This table reflects the correction of an immaterial error in the prior period disclosure. See "Note 1 – Summary of Significant Accounting Policies" for further information.
Term Loans By Origination Fiscal Year
December 31, 2023
2023-S(1)
2023202220212020PriorRevolvingTotal
Commercial and industrial
Risk rating
Pass$19,180 $51,742 $60,487 $14,146 $11,071 $22,352 $49,663 $228,641 
Special mention— 329 227 158 54 81 — 849 
Substandard— 671 341 29 1,380 307 3,707 6,435 
Doubtful
— 713 — — 222 — 264 1,199 
Loss— — — — — 131 — 131 
Total commercial and industrial$19,180 $53,455 $61,055 $14,333 $12,727 $22,871 $53,634 $237,255 
Current period gross charge-offs$— $1,337 $402 $184 $574 $618 $— $3,115 
Equipment finance
Risk rating
Pass$83,332 $172,704 $113,363 $57,295 $25,552 $4,854 $— $457,100 
Special mention— 338 666 383 341 252 — 1,980 
Substandard— 206 — — — 134 — 340 
Doubtful— 2,645 2,498 626 384 — — 6,153 
Loss— — — — — — — — 
Total equipment finance$83,332 $175,893 $116,527 $58,304 $26,277 $5,240 $— $465,573 
Current period gross charge-offs$— $550 $912 $539 $29 $14 $— $2,044 
Municipal leases
Risk rating
Pass$17,372 $34,203 $28,241 $15,742 $7,358 $47,376 $— $150,292 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total municipal leases$17,372 $34,203 $28,241 $15,742 $7,358 $47,376 $— $150,292 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
Total commercial
Risk rating
Pass$119,884 $258,649 $202,091 $87,183 $43,981 $74,582 $49,663 $836,033 
Special mention— 667 893 541 395 333 — 2,829 
Substandard— 877 341 29 1,380 441 3,707 6,775 
Doubtful— 3,358 2,498 626 606 — 264 7,352 
Loss— — — — — 131 — 131 
Total commercial$119,884 $263,551 $205,823 $88,379 $46,362 $75,487 $53,634 $853,120 
Total current period gross charge-offs$— $1,887 $1,314 $723 $603 $632 $— $5,159 
Term Loans By Origination Fiscal Year
December 31, 2023
2023-S(1)
2023202220212020PriorRevolvingTotal
Construction and land development
Risk rating
Pass$7,669 $64,716 $18,841 $4,002 $44 $1,237 $— $96,509 
Special mention— — — — — — — — 
Substandard— — — — — 137 — 137 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total construction and land development$7,669 $64,716 $18,841 $4,002 $44 $1,374 $— $96,646 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
One-to-four family
Risk rating
Pass$19,532 $102,902 $153,029 $109,870 $48,971 $139,061 $5,395 $578,760 
Special mention— — — — — 511 — 511 
Substandard— 383 258 — 202 4,268 — 5,111 
Doubtful— — — — — 23 — 23 
Loss— — — — — — — — 
Total one-to-four family$19,532 $103,285 $153,287 $109,870 $49,173 $143,863 $5,395 $584,405 
Current period gross charge-offs$— $— $13 $3 $12 $4 $— $32 
HELOCs
Risk rating
Pass$— $— $— $— $— $— $183,815 $183,815 
Special mention— — — — — — — — 
Substandard— — — — — — 2,034 2,034 
Doubtful— — — — — — 29 29 
Loss— — — — — — — — 
Total HELOCs$— $— $— $— $— $— $185,878 $185,878 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
Total residential real estate
Risk rating
Pass$27,201 $167,618 $171,870 $113,872 $49,015 $140,298 $189,210 $859,084 
Special mention— — — — — 511 — 511 
Substandard— 383 258 — 202 4,405 2,034 7,282 
Doubtful— — — — — 23 29 52 
Loss— — — — — — — — 
Total residential real estate$27,201 $168,001 $172,128 $113,872 $49,217 $145,237 $191,273 $866,929 
Total current period gross charge-offs$— $— $13 $3 $12 $4 $— $32 
Term Loans By Origination Fiscal Year
December 31, 2023
2023-S(1)
2023202220212020PriorRevolvingTotal
Total consumer
Risk rating
Pass$26,569 $51,351 $14,408 $9,672 $6,313 $4,068 $309 $112,690 
Special mention— — — — — — — — 
Substandard— 329 265 210 172 141 24 1,141 
Doubtful— 7 — 3 — — — 10 
Loss— — — — — 1 — 1 
Total consumer$26,569 $51,687 $14,673 $9,885 $6,485 $4,210 $333 $113,842 
Total current period gross charge-offs$6 $401 $118 $34 $11 $9 $— $579 
The following tables present aging analyses of past due loans (including nonaccrual loans) by segment and class for the periods indicated:
Past DueTotal Loans
30-89 Days90 Days+TotalCurrent
June 30, 2024
Commercial real estate
Construction and land development$1,213 $— $1,213 $314,837 $316,050 
Commercial real estate – owner occupied625 589 1,214 544,417 545,631 
Commercial real estate – non-owner occupied957 — 957 891,696 892,653 
Multifamily— — — 92,292 92,292 
Total commercial real estate2,795 589 3,384 1,843,242 1,846,626 
Commercial
Commercial and industrial1,008 2,606 3,614 262,522 266,136 
Equipment finance6,972 3,384 10,356 450,654 461,010 
Municipal leases— — — 152,509 152,509 
Total commercial7,980 5,990 13,970 865,685 879,655 
Residential real estate
Construction and land development— 132 132 70,547 70,679 
One-to-four family1,062 913 1,975 619,221 621,196 
HELOCs763 1,202 1,965 186,500 188,465 
Total residential real estate1,825 2,247 4,072 876,268 880,340 
Consumer704 207 911 93,922 94,833 
Total loans$13,304 $9,033 $22,337 $3,679,117 $3,701,454 
Past DueTotal Loans
30-89 Days90 Days+TotalCurrent
December 31, 2023
Commercial real estate
Construction and land development$— $— $— $305,269 $305,269 
Commercial real estate – owner occupied657 501 1,158 535,387 536,545 
Commercial real estate – non-owner occupied4,032 — 4,032 871,662 875,694 
Multifamily— — — 88,623 88,623 
Total commercial real estate4,689 501 5,190 1,800,941 1,806,131 
Commercial
Commercial and industrial974 2,667 3,641 233,614 237,255 
Equipment finance5,411 4,019 9,430 456,143 465,573 
Municipal leases— — — 150,292 150,292 
Total commercial6,385 6,686 13,071 840,049 853,120 
Residential real estate
Construction and land development— 132 132 96,514 96,646 
One-to-four family958 1,068 2,026 582,379 584,405 
HELOCs1,240 1,622 2,862 183,016 185,878 
Total residential real estate2,198 2,822 5,020 861,909 866,929 
Consumer535 301 836 113,006 113,842 
Total loans$13,807 $10,310 $24,117 $3,615,905 $3,640,022 
The following table presents the recorded investment in loans on nonaccrual status, by segment and class, including restructured loans. It also includes interest income recognized on nonaccrual loans for the six months ended June 30, 2024.
June 30, 2024
December 31, 2023
90 Days+ &
Still Accruing as of June 30, 2024
Nonaccrual with No ACL as of June 30, 2024
Interest Income Recognized
Commercial real estate
Commercial real estate – owner occupied$1,516 $912 $— $— $18 
Commercial real estate – non-owner occupied4,035 4,032 — — 26 
Multifamily63 74 — — 3 
Total commercial real estate5,614 5,018 — — 47 
Commercial
Commercial and industrial4,362 2,774 — 166 46 
Equipment finance10,741 6,463 — 3,085 134 
Total commercial15,103 9,237 — 3,251 180 
Residential real estate
Construction and land development132 132 — — — 
One-to-four family1,910 2,205 — — 48 
HELOCs1,975 2,173 — — 26 
Total residential real estate4,017 4,510 — — 74 
Consumer535 568 — — 11 
Total loans$25,269 $19,333 $— $3,251 $312 
The following tables present analyses of the ACL on loans by segment for the periods indicated. In addition to the provision (benefit) for credit losses on loans presented below, benefits of $40 and $20 for off-balance sheet credit exposures were recorded for the three and six months ended June 30, 2024, respectively, while no provision for commercial paper was recorded for either period. Benefits of $505 and $105 for off-balance sheet credit exposures were recorded for the three and six months ended June 30, 2023, respectively, while no provision for commercial paper was recorded for either period. In addition, for the six month's ended June 30, 2023, $4,921 and $369 of the provision for credit losses was recognized to establish ACLs on Quantum's loan portfolio and off-balance sheet credit exposure, respectively.
Three Months Ended June 30, 2024
Commercial Real EstateCommercialResidential Real EstateConsumerTotal
Balance at beginning of period$19,953 $16,620 $9,157 $1,772 $47,502 
Provision (benefit) for credit losses586 3,885 (123)(48)4,300 
Charge-offs— (2,423)(40)(320)(2,783)
Recoveries— 33 109 62 204 
Net (charge-offs) recoveries— (2,390)69 (258)(2,579)
Balance at end of period$20,539 $18,115 $9,103 $1,466 $49,223 
Three Months Ended June 30, 2023
Commercial Real EstateCommercialResidential Real EstateConsumerTotal
Balance at beginning of period$21,613 $14,658 $9,122 $2,110 $47,503 
Provision (benefit) for credit losses(923)1,688 126 19 910 
Charge-offs— (1,179)(66)(256)(1,501)
Recoveries— 49 102 130 281 
Net (charge-offs) recoveries— (1,130)36 (126)(1,220)
Balance at end of period$20,690 $15,216 $9,284 $2,003 $47,193 
Six Months Ended June 30, 2024
Commercial Real EstateCommercialResidential Real EstateConsumerTotal
Balance at beginning of period$20,323 $17,025 $9,285 $2,008 $48,641 
Provision (benefit) for credit losses424 5,320 (272)(27)5,445 
Charge-offs(208)(4,808)(60)(651)(5,727)
Recoveries— 578 150 136 864 
Net (charge-offs) recoveries(208)(4,230)90 (515)(4,863)
Balance at end of period$20,539 $18,115 $9,103 $1,466 $49,223 
Six Months Ended June 30, 2023
Commercial Real EstateCommercialResidential Real EstateConsumerTotal
Balance at beginning of period$15,059 $12,382 $9,048 $2,370 $38,859 
Provision (benefit) for credit losses5,339 4,101 26 (196)9,270 
Initial ACL on PCD loans292 72 5 — 369 
Charge-offs— (1,663)(69)(347)(2,079)
Recoveries— 324 274 176 774 
Net (charge-offs) recoveries— (1,339)205 (171)(1,305)
Balance at end of period$20,690 $15,216 $9,284 $2,003 $47,193 
A loan is considered to be collateral dependent when the borrower is experiencing financial difficulty and the repayment is expected to be provided substantially through the operation or sale of collateral. The following tables provide a breakdown between loans identified as CDAs and non-CDAs, by segment and class, as well as collateral coverage for those loans for the periods indicated below:
Type and Extent of Collateral Securing CDAsNon-CDAs
June 30, 2024Residential PropertyInvestment PropertyCommercial PropertyBusiness AssetsTotal
Commercial real estate
Construction and land development$— $— $— $— $316,050 $316,050 
Commercial real estate – owner occupied— — 1,788 — 543,843 545,631 
Commercial real estate – non-owner occupied— — 4,308 — 888,345 892,653 
Multifamily— — — — 92,292 92,292 
Total commercial real estate— — 6,096 — 1,840,530 1,846,626 
Commercial
Commercial and industrial— — — 2,465 263,671 266,136 
Equipment finance— — — 4,832 456,178 461,010 
Municipal leases— — — — 152,509 152,509 
Total commercial— — — 7,297 872,358 879,655 
Residential real estate
Construction and land development— — — — 70,679 70,679 
One-to-four family— — — — 621,196 621,196 
HELOCs— — — — 188,465 188,465 
Total residential real estate— — — — 880,340 880,340 
Consumer— — — — 94,833 94,833 
Total$— $— $6,096 $7,297 $3,688,061 $3,701,454 
Total collateral value$— $— $4,654 $5,470 
Type and Extent of Collateral Securing CDAsNon-CDAs
December 31, 2023Residential PropertyInvestment PropertyCommercial PropertyBusiness AssetsTotal
Commercial real estate
Construction and land development$— $— $— $— $305,269 $305,269 
Commercial real estate – owner occupied— — 1,821 — 534,724 536,545 
Commercial real estate – non-owner occupied— — 4,310 — 871,384 875,694 
Multifamily— — — — 88,623 88,623 
Total commercial real estate— — 6,131 — 1,800,000 1,806,131 
Commercial
Commercial and industrial— — — 1,322 235,933 237,255 
Equipment finance— — — 1,304 464,269 465,573 
Municipal leases— — — — 150,292 150,292 
Total commercial— — — 2,626 850,494 853,120 
Residential real estate
Construction and land development— — — — 96,646 96,646 
One-to-four family— — — — 584,405 584,405 
HELOCs510 — — — 185,368 185,878 
Total residential real estate510 — — — 866,419 866,929 
Consumer— — — — 113,842 113,842 
Total$510 $— $6,131 $2,626 $3,630,755 $3,640,022 
Total collateral value$733 $— $5,627 $686 
Modifications to Borrowers Experiencing Financial Difficulty
The Company modifies loans to borrowers experiencing financial difficulty by providing principal forgiveness, a term extension, an other-than-insignificant payment delay or interest rate adjustments. In some cases, the Company provides multiple types of modifications on one loan. Typically, one type of modification, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another modification, such as principal forgiveness, may be granted. For loans included in the combination columns in the table below, multiple types of modifications have been made on the same loan within the current reporting period.
The following table presents the amortized cost basis of loans at June 30, 2024, that were both experiencing financial difficulty and modified during the three and six months ended June 30, 2024, by class and type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial difficulty as compared to the amortized cost basis of each class of financing receivable is also presented.
Three Months Ended June 30, 2024
Principal ForgivenessPayment DelayTerm ExtensionInterest Rate AdjustmentCombination Term Extension & Principal ForgivenessCombination Term Extension & Interest Rate Reduction% of Total Class of Financing Receivable
Commercial loans
Commercial and industrial$— $759 $630 $147 $— $— 0.58 %
Six Months Ended June 30, 2024
Principal ForgivenessPayment DelayTerm ExtensionInterest Rate AdjustmentCombination Term Extension & Principal ForgivenessCombination Term Extension & Interest Rate Reduction% of Total Class of Financing Receivable
Commercial real estate
Commercial real estate – non-owner-occupied$— $956 $— $— $— $— 0.11 %
Commercial loans
Commercial and industrial— 2,137 630 147 — — 1.10 
Total$— $3,093 $630 $147 $— $— 0.10 %
The following table presents loans that had a payment default during the periods indicated that had previously been modified within the prior twelve months. No loans had a payment default during the three months ended March 31, 2024 that had previously been modified within the prior twelve months. For purposes of this table, a loan is considered to be in default when it becomes 30 days contractually past due under the modified terms.
Three and Six Months Ended June 30, 2024
Principal ForgivenessPayment DelayTerm ExtensionInterest Rate Adjustment
Commercial real estate
Commercial real estate – non-owner-occupied$— $956 $— $— 
Off-Balance Sheet Credit Exposure
The Company maintains a separate reserve for credit losses on off-balance sheet credit exposures, including unfunded loan commitments, which is included in other liabilities on the consolidated balance sheet. The reserve for credit losses on off-balance sheet credit exposures is adjusted as a provision for credit losses in the consolidated statement of income. The estimate includes consideration of the likelihood that funding will occur and an estimate of ECLs on commitments expected to be funded over its estimated life, utilizing the same models and approaches for the Company's other loan portfolio segments described above, as these unfunded commitments share similar risk characteristics as its loan portfolio segments. The Company has identified the unfunded portion of certain lines of credit as unconditionally cancellable credit exposures, meaning the Company can cancel the unfunded commitment at any time. No credit loss estimate is reported for off-balance sheet credit exposures that are unconditionally cancellable by the Company or for undrawn amounts under such arrangements that may be drawn prior to the cancellation of the arrangement. At June 30, 2024 and December 31, 2023, the ACL on off-balance sheet credit exposures included in other liabilities was $2,567 and $2,587, respectively.