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

12 Months Ended

Dec. 31, 2022

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


	December 31, 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	$	15,946	$	1,611,815	$	1,627,761	$	20,875	$	1,363,281	$	1,384,156
Consumer real estate		8,352		579,625		587,977		11,833		465,439		477,272
Construction and land development		1,529		400,972		402,501		2,882		275,504		278,386
Commercial and industrial		1,893		549,974		551,867		2,516		485,508		488,024
Leases		968		66,459		67,427		3,170		50,538		53,708
Consumer and other		3		16,091		16,094		71		11,780		11,851
Total loans and leases		28,691		3,224,936		3,253,627		41,347		2,652,050		2,693,397
Less: Allowance for loan and lease losses		(121)		(23,213)		(23,334)		(179)		(19,173)		(19,352)
Loans and leases, net	$	28,570	$	3,201,723	$	3,230,293	$	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 by loan and lease classification for impaired and performing loan and lease 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
December 31, 2022:
Performing loans and leases	$	1,611,815	$	578,342	$	400,114	$	549,974	$	66,459	$	16,091	$	3,222,795
Impaired loans and leases		—		1,283		858		—		—		—		2,141
		1,611,815		579,625		400,972		549,974		66,459		16,091		3,224,936
PCI loans and leases		15,946		8,352		1,529		1,893		968		3		28,691
Total loans and leases	$	1,627,761	$	587,977	$	402,501	$	551,867	$	67,427	$	16,094	$	3,253,627

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 classification for impaired, PCI, and performing loans (in thousands):


					Construction		Commercial				Consumer
	Commercial		Consumer		and Land		and				and
	Real Estate		Real Estate		Development		Industrial		Leases		Other		Total
December 31, 2022:
Performing loans and leases	$	10,815	$	3,913	$	2,674	$	3,997	$	1,293	$	136	$	22,828
Impaired loans and leases		—		—		385		—		—		—		385
		10,815		3,913		3,059		3,997		1,293		136		23,213
PCI loans and leases		6		115		—		—		—		—		121
Total loans and leases	$	10,821	$	4,028	$	3,059	$	3,997	$	1,293	$	136	$	23,334

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 classification (in thousands):


	Year Ended December 31, 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)		—		(307)		(110)		(744)		(1,194)
Recoveries of charge-offs		6		564		—		184		194		210		1,158
Provision charged to expense		1,034		43		1,177		339		879		546		4,018
Ending balance	$	10,821	$	4,028	$	3,059	$	3,997	$	1,293	$	136	$	23,334


	Year Ended December 31, 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		—		(67)		—		(298)		(166)		(482)		(1,013)
Recoveries of charge-offs		83		39		—		25		41		198		386
Provision charged to expense		2,119		11		(194)		(1,053)		455		295		1,633
Ending balance	$	9,781	$	3,454	$	1,882	$	3,781	$	330	$	124	$	19,352


	Year Ended December 31, 2020
			Consumer		Construction		Commercial
	Commercial		Real		and Land		and				Consumer
	Real Estate		Estate		Development		Industrial		Leases		and Other		Total
Beginning balance	$	4,508	$	2,576	$	1,127	$	1,957	$	—	$	75	$	10,243
Charged-off loans and leases		—		(23)		—		(420)		—		(398)		(841)
Recoveries of charge-offs		19		39		2		114		—		87		261
Provision charged to expense		3,052		879		947		3,456		—		349		8,683
Ending balance	$	7,579	$	3,471	$	2,076	$	5,107	$	—	$	113	$	18,346

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):


	December 31, 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	$	1,579,387	$	576,428	$	399,846	$	545,210	$	66,459	$	16,057	$	3,183,387
Watch		29,810		1,496		224		4,523		—		19		36,072
Special mention		2,539		35		—		61		—		—		2,635
Substandard		79		1,666		902		180		—		15		2,842
Doubtful		—		—		—		—		—		—		—
Total		1,611,815		579,625		400,972		549,974		66,459		16,091		3,224,936

PCI Loans and Leases:
Pass		11,924		6,927		1,054		1,893		968		3		22,769
Watch		1,439		188		46		—		—		—		1,673
Special mention		11		54		—		—		—		—		65
Substandard		2,572		1,183		429		—		—		—		4,184
Doubtful		—		—		—		—		—		—		—
Total		15,946		8,352		1,529		1,893		968		3		28,691
Total loans and leases	$	1,627,761	$	587,977	$	402,501	$	551,867	$	67,427	$	16,094	$	3,253,627


	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):


	December 31, 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	$	54	$	—	$	—	$	—	$	54	$	15,946	$	1,611,761	$	1,627,761
Consumer real estate		594		—		—		1,665		2,259		8,352		577,366		587,977
Construction and land development		—		—		—		920		920		1,529		400,052		402,501
Commercial and industrial		185		18		—		180		383		1,893		549,591		551,867
Leases		1,024		84		143		28		1,279		968		65,180		67,427
Consumer and other		103		4		—		15		122		3		15,969		16,094
Total	$	1,960	$	106	$	143	$	2,808	$	5,017	$	28,691	$	3,219,919	$	3,253,627


	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):


	December 31, 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	$	—	$	—	$	—	$	—	$	—	$	—
Consumer real estate		1,283		1,282		—		1,805		1,806		—
Construction and land development		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—
Leases		—		—		—		—		—		—
Consumer and other		—		—		—		—		—		—
		1,283		1,282		—		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		385		—		—		—
Commercial and industrial		—		—		—		97		96		96
Leases		—		—		—		—		—		—
Consumer and other		—		—		—		—		—		—
		858		858		385		1,215		1,217		561
PCI loans and leases:
Commercial real estate		500		580		6		707		926		30
Consumer real estate		684		646		115		1,129		1,251		148
Construction and land development		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—
Leases		—		—		—		—		—		—
Consumer and other		—		—		—		5		3		1
		1,184		1,226		121		1,841		2,180		179
Total impaired loans and leases	$	3,325	$	3,366	$	506	$	4,861	$	5,203	$	740


	Year Ended December 31,
	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	$	122	$	—	$	800	$	1
Consumer real estate		1,728		94		1,783		78
Construction and land development		—		—		—		—
Commercial and industrial		—		—		—		—
Leases		—		—		—		—
Consumer and other		—		—		—		—
		1,850		94		2,583		79
Impaired loans and leases with a valuation allowance:
Commercial real estate		343		—		1,145		104
Consumer real estate		52		—		334		14
Construction and land development		515		—		—		—
Commercial and industrial		19		—		132		8
Leases		—		—		—		—
Consumer and other		—		—		—		—
		929		—		1,611		126
PCI loans and leases:
Commercial real estate		702		57		488		42
Consumer real estate		819		50		1,140		83
Construction and land development		—		—		—		—
Commercial and industrial		—		—		197		3
Leases		—		—		—		—
Consumer and other		2		—		13		—
		1,523		107		1,838		128
Total impaired loans and leases	$	4,302	$	201	$	6,032	$	333

Troubled Debt Restructurings on Loans

The following table presents a summary of loans that were modified as troubled debt restructurings at December 31, 2022 (dollars in thousands):


		Pre-Modification		Post-Modification
		Outstanding		Outstanding
		Recorded		Recorded
December 31, 2022	Number of Contracts	Investment		Investment
Consumer real estate	1	$	74	$	97
Consumer and other	1		10		4

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 which 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 for the years ended December 31, are as follows (in thousands):


	December 31,		December 31,
	2022		2021
Commercial real estate	$	25,364	$	31,600
Consumer real estate		10,225		14,215
Construction and land development		2,202		3,699
Commercial and industrial		2,424		3,424
Leases		1,211		3,557
Consumer and other		27		125
Total loans and leases		41,453		56,620
Less: Remaining purchase discount		(12,762)		(15,273)
Total loans and leases, net of purchase discount		28,691		41,347
Less: Allowance for loan and leases losses		(121)		(179)
Carrying amount, net of allowance	$	28,570	$	41,168

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

The following is a summary of the accretable yield on acquired loans and leases for the years ended December 31, (in thousands):


	2022		2021		2020
Accretable yield, beginning of period	$	14,618	$	16,889	$	8,454
Additions		—		4,202		2,515
Accretion income		(4,561)		(6,306)		(5,347)
Reclassification		2,295		2,214		2,792
Other changes, net		4,504		(2,381)		8,475
Accretable yield, end of period	$	16,856	$	14,618	$	16,889

Schedule of Loan to Directors, Officers and Affiliated Parties

A summary of activity in loans to related parties is as follows (in thousands):


	2022		2021
Balance, beginning of year	$	13,970	$	14,459
Disbursements		3,162		1,306
Repayments		(2,886)		(1,795)
Balance, end of year	$	14,246	$	13,970