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Loans and Leases and Allowance for Loan and Lease Losses (Tables)

6 Months Ended

Jun. 30, 2022

Major categories of loans and leases are summarized as follows (in thousands):


	June 30, 2022						December 31, 2021
	PCI		All Other				PCI		All Other
	Loans and Leases¹		Loans and Leases		Total		Loans and Leases¹		Loans and Leases		Total
Commercial real estate	$	18,689	$	1,515,899	$	1,534,588	$	20,875	$	1,363,281	$	1,384,156
Consumer real estate		9,396		524,186		533,582		11,833		465,439		477,272
Construction and land development		2,440		361,928		364,368		2,882		275,504		278,386
Commercial and industrial		2,518		481,070		483,588		2,516		485,508		488,024
Leases		1,975		61,289		63,264		3,170		50,538		53,708
Consumer and other		14		14,670		14,684		71		11,780		11,851
Total loans and leases		35,032		2,959,042		2,994,074		41,347		2,652,050		2,693,397
Less: Allowance for loan and lease losses		(178)		(21,760)		(21,938)		(179)		(19,173)		(19,352)
Loans and leases, net	$	34,854	$	2,937,282	$	2,972,136	$	41,168	$	2,632,877	$	2,674,045

¹Purchased Credit Impaired loans and leases (“PCI loans and leases”) are loans and leases with evidence of credit deterioration at purchase.

Schedule of Impaired and Performing Loans Receivable

The composition of loans and leases by loan classification for performing, impaired and PCI loan and leases status is summarized in the tables below (in thousands):


					Construction		Commercial
	Commercial		Consumer		and Land		and				Consumer
	Real Estate		Real Estate		Development		Industrial		Leases		and Other		Total
June 30, 2022:
Performing loans and leases	$	1,515,596	$	522,338	$	361,070	$	481,070	$	61,289	$	14,670	$	2,956,033
Impaired loans and leases		303		1,848		858		—		—		—		3,009
		1,515,899		524,186		361,928		481,070		61,289		14,670		2,959,042
PCI loans and leases		18,689		9,396		2,440		2,518		1,975		14		35,032
Total loans and leases	$	1,534,588	$	533,582	$	364,368	$	483,588	$	63,264	$	14,684	$	2,994,074

December 31, 2021:
Performing loans and leases	$	1,362,423	$	463,374	$	275,504	$	485,411	$	50,538	$	11,780	$	2,649,030
Impaired loans and leases		858		2,065		—		97		—		—		3,020
		1,363,281		465,439		275,504		485,508		50,538		11,780		2,652,050
PCI loans and leases		20,875		11,833		2,882		2,516		3,170		71		41,347
Total loans and leases	$	1,384,156	$	477,272	$	278,386	$	488,024	$	53,708	$	11,851	$	2,693,397

Schedule of Allowance for Loan Losses for Impaired and Performing Loans Receivable

The following tables show the allowance for loan and lease losses allocation by loan and lease classification for impaired, PCI, and performing (in thousands):


					Construction		Commercial				Consumer
	Commercial		Consumer		and Land		and				and
	Real Estate		Real Estate		Development		Industrial		Leases		Other		Total
June 30, 2022:
Performing loans and leases	$	10,565	$	3,693	$	2,509	$	3,659	$	807	$	132	$	21,365
Impaired loans and leases		—		—		395		—		—		—		395
		10,565		3,693		2,904		3,659		807		132		21,760
PCI loans and leases		35		142		—		—		—		1		178
Total loans and leases	$	10,600	$	3,835	$	2,904	$	3,659	$	807	$	133	$	21,938

December 31, 2021:
Performing loans and leases	$	9,355	$	3,237	$	1,882	$	3,685	$	330	$	123	$	18,612
Impaired loans and leases		396		69		—		96		—		—		561
		9,751		3,306		1,882		3,781		330		123		19,173
PCI loans and leases		30		148		—		—		—		1		179
Total loans and leases	$	9,781	$	3,454	$	1,882	$	3,781	$	330	$	124	$	19,352

Schedule of Allowance for Loan Losses

The following tables detail the changes in the allowance for loan and lease losses by loan and lease classification (in thousands):


	Three Months Ended June 30, 2022
			Consumer		Construction		Commercial
	Commercial		Real		and Land		and				Consumer
	Real Estate		Estate		Development		Industrial		Leases		and Other		Total
Beginning balance	$	10,405	$	3,388	$	2,120	$	3,501	$	548	$	116	$	20,078
Charged-off loans and leases		—		—		—		—		(23)		(120)		(143)
Recoveries of charge-offs		2		547		—		126		6		72		753
Provision charged to expense		193		(100)		784		32		276		65		1,250
Ending balance	$	10,600	$	3,835	$	2,904	$	3,659	$	807	$	133	$	21,938


	Three Months Ended June 30, 2021
			Consumer		Construction		Commercial
	Commercial		Real		and Land		and				Consumer
	Real Estate		Estate		Development		Industrial		Leases		and Other		Total
Beginning balance	$	7,636	$	3,309	$	1,968	$	5,347	$	—	$	110	$	18,370
Charged-off loans and leases		—		(60)		—		(4)		—		(89)		(153)
Recoveries of charge-offs		3		5		—		7		—		83		98
Provision charged to expense		743		69		93		(908)		—		(2)		(5)
Ending balance	$	8,382	$	3,323	$	2,061	$	4,442	$	—	$	102	$	18,310


	Six Months Ended June 30, 2022
			Consumer		Construction		Commercial
	Commercial		Real		and Land		and				Consumer
	Real Estate		Estate		Development		Industrial		Leases		and Other		Total
Beginning balance	$	9,781	$	3,454	$	1,882	$	3,781	$	330	$	124	$	19,352
Charged-off loans and leases		—		(33)		—		(188)		(108)		(302)		(631)
Recoveries of charge-offs		3		554		—		143		163		98		961
Provision charged to expense		816		(140)		1,022		(77)		422		213		2,256
Ending balance	$	10,600	$	3,835	$	2,904	$	3,659	$	807	$	133	$	21,938


	Six Months Ended June 30, 2021
			Consumer		Construction		Commercial
	Commercial		Real		and Land		and				Consumer
	Real Estate		Estate		Development		Industrial		Leases		and Other		Total
Beginning balance	$	7,579	$	3,471	$	2,076	$	5,107	$	—	$	113	$	18,346
Charged-off loans and leases		—		(60)		—		(4)		—		(209)		(273)
Recoveries of charge-offs		6		21		—		10		—		138		175
Provision charged to expense		797		(109)		(15)		(671)		—		60		62
Ending balance	$	8,382	$	3,323	$	2,061	$	4,442	$	—	$	102	$	18,310

Loan Credit Quality Indicators

The following tables outline the amount of each loan and lease classification and the amount categorized into each risk rating (in thousands):


	June 30, 2022
					Construction		Commercial
	Commercial		Consumer		and Land		and				Consumer
Non PCI Loans and Leases:	Real Estate		Real Estate		Development		Industrial		Leases		and Other		Total
Pass	$	1,481,916	$	518,828	$	360,763	$	476,149	$	61,289	$	14,638	$	2,913,583
Watch		24,997		1,669		231		4,758		—		22		31,677
Special mention		8,603		1,492		68		87		—		—		10,250
Substandard		383		2,197		866		76		—		10		3,532
Doubtful		—		—		—		—		—		—		—
Total		1,515,899		524,186		361,928		481,070		61,289		14,670		2,959,042

PCI Loans and Leases:
Pass		13,769		8,105		1,954		2,518		1,975		14		28,335
Watch		1,230		126		44		—		—		—		1,400
Special mention		12		56		—		—		—		—		68
Substandard		3,678		1,109		442		—		—		—		5,229
Doubtful		—		—		—		—		—		—		—
Total		18,689		9,396		2,440		2,518		1,975		14		35,032
Total loans and leases	$	1,534,588	$	533,582	$	364,368	$	483,588	$	63,264	$	14,684	$	2,994,074


	December 31, 2021
					Construction		Commercial
	Commercial		Consumer		and Land		and				Consumer
Non PCI Loans and Leases:	Real Estate		Real Estate		Development		Industrial		Leases		and Other		Total
Pass	$	1,330,888	$	460,190	$	275,124	$	480,677	$	50,538	$	11,724	$	2,609,141
Watch		27,246		1,334		237		4,345		—		42		33,204
Special mention		4,120		1,525		70		228		—		—		5,943
Substandard		1,027		2,390		73		213		—		14		3,717
Doubtful		—		—		—		45		—		—		45
Total		1,363,281		465,439		275,504		485,508		50,538		11,780		2,652,050

PCI Loans and Leases:
Pass		16,019		9,714		2,335		2,516		3,170		71		33,825
Watch		1,271		539		91		—		—		—		1,901
Special mention		15		68		—		—		—		—		83
Substandard		3,570		1,512		456		—		—		—		5,538
Doubtful		—		—		—		—		—		—		—
Total		20,875		11,833		2,882		2,516		3,170		71		41,347
Total loans and leases	$	1,384,156	$	477,272	$	278,386	$	488,024	$	53,708	$	11,851	$	2,693,397

Past Due Loans and Leases

The following tables present an aging analysis of our loan and lease portfolio (in thousands):


	June 30, 2022
	30-60 Days		61-89 Days		Past Due 90				Total
	Past Due and		Past Due and		Days or More				Past Due and
	Accruing		Accruing		and Accruing		Nonaccrual		Nonaccrual		PCI		Current		Total
Commercial real estate	$	41	$	—	$	—	$	303	$	344	$	18,689	$	1,515,555	$	1,534,588
Consumer real estate		858		—		—		2,171		3,029		9,396		521,157		533,582
Construction and land development		43		—		—		858		901		2,440		361,027		364,368
Commercial and industrial		327		20		—		43		390		2,518		480,680		483,588
Leases		154		—		—		29		183		1,975		61,106		63,264
Consumer and other		155		2		—		9		166		14		14,504		14,684
Total	$	1,578	$	22	$	—	$	3,413	$	5,013	$	35,032	$	2,954,029	$	2,994,074


	December 31, 2021
	30-60 Days		61-89 Days		Past Due 90				Total
	Past Due and		Past Due and		Days or More				Past Due and
	Accruing		Accruing		and Accruing		Nonaccrual		Nonaccrual		PCI		Current		Total
Commercial real estate	$	172	$	—	$	—	$	858	$	1,030	$	20,875	$	1,362,251	$	1,384,156
Consumer real estate		884		10		—		2,139		3,033		11,833		462,406		477,272
Construction and land development		91		—		—		—		91		2,882		275,413		278,386
Commercial and industrial		1,191		119		45		116		1,471		2,516		484,037		488,024
Leases		361		—		—		—		361		3,170		50,177		53,708
Consumer and other		99		4		19		11		133		71		11,647		11,851
Total	$	2,798	$	133	$	64	$	3,124	$	6,119	$	41,347	$	2,645,931	$	2,693,397

Impaired Loans

The following is an analysis of the impaired loan and lease portfolio, including PCI loans and leases, detailing the related allowance recorded (in thousands):


	June 30, 2022						December 31, 2021
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
Impaired loans and leases without a valuation allowance:
Commercial real estate	$	303	$	303	$	—	$	—	$	—	$	—
Consumer real estate		1,848		1,848		—		1,805		1,806		—
Construction and land development		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—
Leases		—		—		—		—		—		—
Consumer and other		—		—		—		—		—		—
		2,151		2,151		—		1,805		1,806		—
Impaired loans and leases with a valuation allowance:
Commercial real estate		—		—		—		858		859		396
Consumer real estate		—		—		—		260		262		69
Construction and land development		858		858		395		—		—		—
Commercial and industrial		—		—		—		97		96		96
Leases		—		—		—		—		—		—
Consumer and other		—		—		—		—		—		—
		858		858		395		1,215		1,217		561
PCI loans and leases:
Commercial real estate		528		603		35		707		926		30
Consumer real estate		887		850		142		1,129		1,251		148
Construction and land development		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—
Leases		—		—		—		—		—		—
Consumer and other		2		1		1		5		3		1
		1,417		1,454		178		1,841		2,180		179
Total impaired loans and leases	$	4,426	$	4,463	$	573	$	4,861	$	5,203	$	740


	Three Months Ended June 30,
	2022				2021
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
Impaired loans and leases without a valuation allowance:
Commercial real estate	$	152	$	—	$	65	$	—
Consumer real estate		1,957		3		2,033		8
Construction and land development		—		—		—		—
Commercial and industrial		—		—		—		—
Leases		—		—		—		—
Consumer and other		—		—		—		—
		2,109		3		2,098		8
Impaired loans and leases with a valuation allowance:
Commercial real estate		429		—		2,007		2
Consumer real estate		—		—		360		3
Construction and land development		429		—		—		—
Commercial and industrial		—		—		159		3
Leases		—		—		—		—
Consumer and other		—		—		—		—
		858		—		2,526		8
PCI loans and leases:
Commercial real estate		538		11		—		—
Consumer real estate		855		12		1,115		21
Construction and land development		—		—		—		—
Commercial and industrial		—		—		263		1
Leases		—		—		—		—
Consumer and other		3		—		16		—
		1,396		23		1,394		22
Total impaired loans and leases	$	4,363	$	26	$	6,018	$	38


	Six Months Ended June 30,
	2022				2021
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
Impaired loans and leases without a valuation allowance:
Commercial real estate	$	101	$	—	$	1,334	$	1
Consumer real estate		1,907		20		1,651		20
Construction and land development		—		—		—		—
Commercial and industrial		—		—		—		—
Leases		—		—		—		—
Consumer and other		—		—		—		—
		2,008		20		2,985		21
Impaired loans and leases with a valuation allowance:
Commercial real estate		572		—		1,338		104
Consumer real estate		87		—		383		8
Construction and land development		286		—		—		—
Commercial and industrial		32		—		154		5
Leases		—		—		—		—
Consumer and other		—		—		—		—
		977		—		1,875		117
PCI loans and leases:
Commercial real estate		885		35		—		—
Consumer real estate		878		28		1,165		43
Construction and land development		—		—		—		—
Commercial and industrial		—		—		266		2
Leases		—		—		—		—
Consumer and other		3		—		18		—
		1,766		63		1,449		45
Total impaired loans and leases	$	4,751	$	83	$	6,309	$	183

Certain Loans Acquired In Transfer Not Accounted For As Debt Securities, Acquired During Period Carrying Amount Of Loans

The Company has acquired loans and leases where there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans and leases are as follows (in thousands):


	June 30,		December 31,
	2022		2021
Commercial real estate	$	29,312	$	31,600
Consumer real estate		11,438		14,215
Construction and land development		3,357		3,699
Commercial and industrial		3,072		3,424
Leases		2,272		3,557
Consumer and other		52		125
Total loans and leases		49,503		56,620
Less: Remaining purchase discount		(14,471)		(15,273)
Total loans and leases, net of purchase discount		35,032		41,347
Less: Allowance for loan and leases losses		(178)		(179)
Carrying amount, net of allowance	$	34,854	$	41,168

Schedule of Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield Movement

Activity related to the accretable yield on loans and leases acquired with deteriorated credit quality is as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Accretable yield, beginning of period	$	21,281	$	14,705	$	14,618	$	16,889
Additions		—		649		—		649
Accretion income		(845)		(1,098)		(1,941)		(3,029)
Reclassification		129		1,340		398		1,677
Other changes, net		(4,829)		(1,074)		2,661		(1,664)
Accretable yield, end of period	$	15,736	$	14,522	$	15,736	$	14,522