XML 38 R13.htm IDEA: XBRL DOCUMENT
v3.22.4

Loans and Allowance for Credit Losses | 12 Months Ended
--- | ---
Dec. 31, 2022
Receivables [Abstract] |
Loans and Allowance for Credit Losses | Loans and Allowance for Credit Losses The Bank makes loans to customers primarily in the Washington, D.C. metropolitan area and surrounding communities. A substantial portion of the Bank’s loan portfolio consists of loans to businesses secured by real estate and other business assets. Loans, net of unamortized net deferred fees, at December 31, 2022 and 2021 are summarized by type as follows:
|  | December 31, 2022 |  | December 31, 2021
(dollars in thousands) |  | Amount |  | % |  | Amount |  | %
Commercial |  | $ | 1,487,349 |  |  | 19 | % |  | $ | 1,354,317 |  |  | 19 | %
PPP loans |  | 3,256 |  |  | — | % |  | 51,105 |  |  | 1 | %
Income producing - commercial real estate |  | 3,919,941 |  |  | 51 | % |  | 3,385,298 |  |  | 48 | %
Owner occupied - commercial real estate |  | 1,110,325 |  |  | 15 | % |  | 1,087,776 |  |  | 15 | %
Real estate mortgage - residential |  | 73,001 |  |  | 1 | % |  | 73,966 |  |  | 1 | %
Construction - commercial and residential |  | 877,755 |  |  | 12 | % |  | 896,319 |  |  | 13 | %
Construction - C&I (owner occupied) |  | 110,479 |  |  | 1 | % |  | 159,579 |  |  | 2 | %
Home equity |  | 51,782 |  |  | 1 | % |  | 55,811 |  |  | 1 | %
Other consumer |  | 1,744 |  |  | — |  |  | 1,427 |  |  | — |
Total loans |  | 7,635,632 |  |  | 100 | % |  | 7,065,598 |  |  | 100 | %
Less: allowance for credit losses |  | (74,444) |  |  |  |  | (74,965) |  |  |
Net loans |  | $ | 7,561,188 |  |  |  |  | $ | 6,990,633 |  |  |
Unamortized net deferred fees amounted to $29.2 million and $26.9 million at December 31, 2022 and 2021. As of December 31, 2022 and 2021, the Bank serviced $361.5 million and $351.1 million, respectively, of multifamily FHA loans, SBA loans and other loan participations, which are not reflected as loan balances on the Consolidated Balance Sheets. Real estate loans are secured primarily by duly recorded first deeds of trust or mortgages. In some cases, the Bank may accept a recorded junior trust position. In general, borrowers will have a proven ability to build, lease, manage and/or sell a commercial or residential project and demonstrate satisfactory financial condition. Additionally, an equity contribution toward the project is customarily required. Construction loans require that the financial condition and experience of the general contractor and major subcontractors be satisfactory to the Bank. Guaranteed, fixed price contracts are required whenever appropriate, along with payment and performance bonds or completion bonds for larger scale projects. Loans intended for residential land acquisition, lot development and construction are made on the premise that the land: 1) is or will be developed for building sites for residential structures; and 2) will ultimately be utilized for construction or improvement of residential zoned real properties, including the creation of housing. Residential development and construction loans will finance projects such as single family subdivisions, planned unit developments, townhouses and condominiums. Residential land acquisition, development and construction loans generally are underwritten with a maximum term of 36 months, including extensions approved at origination. Commercial land acquisition and construction loans are secured by real property where loan funds will be used to acquire land and to construct or improve appropriately zoned real property for the creation of income producing or owner user commercial properties. Borrowers are generally required to put equity into each project at levels determined by the appropriate Loan Committee. Commercial land acquisition and construction loans generally are underwritten with a maximum term of 24 months. Substantially all construction draw requests must be presented in writing on American Institute of Architects documents and certified either by the contractor, the borrower and/or the borrower’s architect. Each draw request shall also include the borrower’s soft cost breakdown certified by the borrower or their Chief Financial Officer. Prior to an advance, the Bank or its contractor inspects the project to determine that the work has been completed, to justify the draw requisition. Commercial permanent loans are generally secured by improved real property which is generating income in the normal course of operation. Debt service coverage, assuming stabilized occupancy, must be satisfactory to support a permanent loan. The debt service coverage ratio is ordinarily at least 1.15 to 1.0. As part of the underwriting process, debt service coverage ratios are stress tested assuming a 200 basis point increase in interest rates from their current levels. Commercial permanent loans generally are underwritten with a term not greater than 10 years or the remaining useful life of the property, whichever is lower. The preferred term is between five to seven years, with amortization to a maximum of 25 years. The Company’s loan portfolio includes ADC real estate loans including both investment and owner occupied projects. ADC loans amounted to $1.5 billion at December 31, 2022. A portion of the ADC portfolio, both speculative and non-speculative, includes loan funded interest reserves at origination. ADC loans that provide for the use of interest reserves represent approximately 56% of the outstanding ADC loan portfolio at December 31, 2022. The decision to establish a loan-funded interest reserve is made upon origination of the ADC loan and is based upon a number of factors considered during underwriting of the credit including: (1) the feasibility of the project; (2) the experience of the sponsor; (3) the creditworthiness of the borrower and guarantors; (4) borrower equity contribution; and (5) the level of collateral protection. When appropriate, an interest reserve provides an effective means of addressing the cash flow characteristics of a properly underwritten ADC loan. The Company does not significantly utilize interest reserves in other loan products. The Company recognizes that one of the risks inherent in the use of interest reserves is the potential masking of underlying problems with the project and/or the borrower’s ability to repay the loan. In order to mitigate this inherent risk, the Company employs a series of reporting and monitoring mechanisms on all ADC loans, whether or not an interest reserve is provided, including: (1) construction and development timelines which are monitored on an ongoing basis which track the progress of a given project to the timeline projected at origination; (2) a construction loan administration department independent of the lending function; (3) third party independent construction loan inspection reports; (4) monthly interest reserve monitoring reports detailing the balance of the interest reserves approved at origination and the days of interest carry represented by the reserve balances as compared to the then current anticipated time to completion and/or sale of speculative projects; and (5) quarterly commercial real estate construction meetings among senior Company management, which includes monitoring of current and projected real estate market conditions. If a project has not performed as expected, it is not the customary practice of the Company to increase loan funded interest reserves. The following tables detail activity in the ACL by portfolio segment for the years ended December 31, 2022, 2021 and 2020. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.
(dollars in thousands) |  | Commercial |  | Income Producing - Commercial Real Estate |  | Owner Occupied - Commercial Real Estate |  | Real Estate Mortgage - Residential |  | Construction - Commercial and Residential |  | Home Equity |  | Other Consumer |  | Total
Year Ended December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period |  | $ | 14,475 |  |  | $ | 38,287 |  |  | $ | 12,146 |  |  | $ | 449 |  |  | $ | 9,099 |  |  | $ | 474 |  |  | $ | 35 |  |  | $ | 74,965 |
Loans charged-off |  | (1,561) |  |  | (1,355) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (79) |  |  | (2,995) |
Recoveries of loans previously charged-off |  | 713 |  |  | 25 |  |  | — |  |  | — |  |  | 1,627 |  |  | — |  |  | 6 |  |  | 2,371 |
Net loans charged-off |  | (848) |  |  | (1,330) |  |  | — |  |  | — |  |  | 1,627 |  |  | — |  |  | (73) |  |  | (624) |
Provision for credit losses |  | 2,028 |  |  | (1,269) |  |  | 556 |  |  | 520 |  |  | (1,925) |  |  | 81 |  |  | 112 |  |  | 103 |
Ending balance |  | $ | 15,655 |  |  | $ | 35,688 |  |  | $ | 12,702 |  |  | $ | 969 |  |  | $ | 8,801 |  |  | $ | 555 |  |  | $ | 74 |  |  | $ | 74,444 |
Year Ended December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period prior to adoption of ASC 326 |  | $ | 26,569 |  |  | $ | 55,385 |  |  | $ | 14,000 |  |  | $ | 1,020 |  |  | $ | 11,529 |  |  | $ | 1,039 |  |  | $ | 37 |  |  | $ | 109,579 |
Impact of adopting ASC 326 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Loans charged-off |  | (8,788) |  |  | — |  |  | (5,444) |  |  | — |  |  | (206) |  |  | — |  |  | (1) |  |  | (14,439) |
Recoveries of loans previously charged-off |  | 486 |  |  | — |  |  | 97 |  |  | — |  |  | 499 |  |  | — |  |  | 18 |  |  | 1,100 |
Net loans (charged-off) recoveries |  | (8,302) |  |  | — |  |  | (5,347) |  |  | — |  |  | 293 |  |  | — |  |  | 17 |  |  | (13,339) |
Provision for credit losses |  | (3,792) |  |  | (17,098) |  |  | 3,493 |  |  | (571) |  |  | (2,723) |  |  | (565) |  |  | (19) |  |  | (21,275) |
Ending balance |  | $ | 14,475 |  |  | $ | 38,287 |  |  | $ | 12,146 |  |  | $ | 449 |  |  | $ | 9,099 |  |  | $ | 474 |  |  | $ | 35 |  |  | $ | 74,965 |
Year Ended December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period prior to adoption of ASC 326 |  | $ | 18,832 |  |  | $ | 29,265 |  |  | $ | 5,838 |  |  | $ | 1,557 |  |  | $ | 17,485 |  |  | $ | 656 |  |  | $ | 25 |  |  | $ | 73,658 |
Impact of adopting ASC 326 |  | 892 |  |  | 11,230 |  |  | 4,674 |  |  | (301) |  |  | (6,143) |  |  | 245 |  |  | 17 |  |  | 10,614 |
Loans charged-off |  | (12,082) |  |  | (4,300) |  |  | (20) |  |  | (815) |  |  | (2,947) |  |  | (92) |  |  | (3) |  |  | (20,259) |
Recoveries of loans previously charged-off |  | 130 |  |  | — |  |  | — |  |  | — |  |  | 4 |  |  | — |  |  | 28 |  |  | 162 |
Net loans (charged-off) recoveries |  | (11,952) |  |  | (4,300) |  |  | (20) |  |  | (815) |  |  | (2,943) |  |  | (92) |  |  | 25 |  |  | (20,097) |
Provision for credit losses |  | 18,797 |  |  | 19,190 |  |  | 3,508 |  |  | 579 |  |  | 3,130 |  |  | 230 |  |  | (30) |  |  | 45,404 |
Ending balance |  | $ | 26,569 |  |  | $ | 55,385 |  |  | $ | 14,000 |  |  | $ | 1,020 |  |  | $ | 11,529 |  |  | $ | 1,039 |  |  | $ | 37 |  |  | $ | 109,579 |
The following table presents the ending allowance balance attributable to loans individually and collectively evaluated, as well as associated loan balances, as of December 31, 2022 and 2021:
(dollars in thousands) |  | Commercial |  | Income Producing - Commercial Real Estate |  | Owner Occupied - Commercial Real Estate |  | Real Estate Mortgage - Residential |  | Construction - Commercial and Residential |  | Home Equity |  | Other Consumer |  | Total
Year Ended December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending Allowance Balance Attributable to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 1,644 |  |  | $ | 3,198 |  |  | $ | — |  |  | $ | 294 |  |  | $ | — |  |  | $ | — |  |  | $ | 47 |  |  | $ | 5,183 |
Collectively evaluated for impairment |  | 14,011 |  |  | 32,490 |  |  | 12,702 |  |  | 675 |  |  | 8,801 |  |  | 555 |  |  | 27 |  |  | 69,261 |
Total Allowance Ending Balance |  | $ | 15,655 |  |  | $ | 35,688 |  |  | $ | 12,702 |  |  | $ | 969 |  |  | $ | 8,801 |  |  | $ | 555 |  |  | $ | 74 |  |  | $ | 74,444 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans Individually evaluated for impairment |  | $ | 3,434 |  |  | $ | 6,328 |  |  | $ | 19,187 |  |  | $ | 1,698 |  |  | $ | — |  |  | $ | — |  |  | $ | 50 |  |  | $ | 30,697 |
Loans Collectively evaluated for impairment |  | 1,487,171 |  |  | 3,913,613 |  |  | 1,091,138 |  |  | 71,303 |  |  | 988,234 |  |  | 51,782 |  |  | 1,694 |  |  | 7,604,935 |
Total Ending Loans Balance |  | $ | 1,490,605 |  |  | $ | 3,919,941 |  |  | $ | 1,110,325 |  |  | $ | 73,001 |  |  | $ | 988,234 |  |  | $ | 51,782 |  |  | $ | 1,744 |  |  | $ | 7,635,632 |
Year Ended December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending Allowance Balance Attributable to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 1,799 |  |  | $ | 5,156 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 6,955 |
Collectively evaluated for impairment |  | 12,676 |  |  | 33,131 |  |  | 12,146 |  |  | 449 |  |  | 9,099 |  |  | 474 |  |  | 35 |  |  | 68,010 |
Total Allowance Ending Balance |  | $ | 14,475 |  |  | $ | 38,287 |  |  | $ | 12,146 |  |  | $ | 449 |  |  | $ | 9,099 |  |  | $ | 474 |  |  | $ | 35 |  |  | $ | 74,965 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans Individually evaluated for impairment |  | $ | 11,284 |  |  | $ | 22,570 |  |  | $ | 42 |  |  | $ | 1,779 |  |  | $ | 3,093 |  |  | $ | 366 |  |  | $ | — |  |  | $ | 39,134 |
Loans Collectively evaluated for impairment |  | 1,394,138 |  |  | 3,362,728 |  |  | 1,087,734 |  |  | 72,187 |  |  | 1,052,805 |  |  | 55,445 |  |  | 1,427 |  |  | 7,026,464 |
Total Ending Loans Balance |  | $ | 1,405,422 |  |  | $ | 3,385,298 |  |  | $ | 1,087,776 |  |  | $ | 73,966 |  |  | $ | 1,055,898 |  |  | $ | 55,811 |  |  | $ | 1,427 |  |  | $ | 7,065,598 |
The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2022 and 2021:
|  | December 31, 2022 |  | December 31, 2021
(dollars in thousands) |  | Business/Other Assets |  | Real Estate |  | Business/Other Assets |  | Real Estate
Commercial |  | $ | 1,563 |  |  | $ | 1,871 |  |  | $ | 3,098 |  |  | $ | 6,821 |
PPP loans |  | — |  |  | — |  |  | 1,365 |  |  | — |
Income-producing-commercial real estate |  | 2,000 |  |  | 4,328 |  |  | 3,193 |  |  | 19,378 |
Owner occupied - commercial real estate |  | — |  |  | 19,187 |  |  | — |  |  | 42 |
Real estate mortgage- residential |  | — |  |  | 1,698 |  |  | — |  |  | 1,779 |
Construction - commercial and residential |  | — |  |  | — |  |  | — |  |  | 3,093 |
Home Equity |  | — |  |  | — |  |  | — |  |  | 366 |
Other consumer |  | 50 |  |  | — |  |  | — |  |  | — |
Total |  | $ | 3,613 |  |  | $ | 27,084 |  |  | $ | 7,656 |  |  | $ | 31,479 |
Credit Quality Indicators The Company uses several credit quality indicators to manage credit risk in an ongoing manner. The Company’s primary credit quality indicator is an internal credit risk rating system that categorizes loans into pass, watch, special mention or classified categories. Credit risk ratings are applied individually to those classes of loans that have significant or unique credit characteristics that benefit from a case-by-case evaluation. These are typically loans to businesses or individuals in the classes which comprise the commercial portfolio segment. Groups of loans that are underwritten and structured using standardized criteria and characteristics, such as statistical models (e.g., credit scoring or payment performance), are typically risk rated and monitored collectively. These are typically loans to individuals in the classes which comprise the consumer portfolio segment. The following are the definitions of the Company’s credit quality indicators:
Pass: | Loans in all classes that comprise the commercial and consumer portfolio segments that are not adversely rated, are contractually current as to principal and interest and are otherwise in compliance with the contractual terms of the loan agreement. Management believes that there is a low likelihood of loss related to those loans that are considered pass.
Watch: | Loan is paying as agreed with generally acceptable asset quality; however the obligor’s performance has not met expectations. Balance sheet and/or income statement has shown deterioration to the point that the obligor could not sustain any further setbacks. Credit is expected to be strengthened through improved obligor performance and/or additional collateral within a reasonable period of time.
Special Mention: | Loans in the classes that comprise the commercial portfolio segment that have potential weaknesses that deserve management’s close attention. If not addressed, these potential weaknesses may result in deterioration of the repayment prospects for the loan. The special mention credit quality indicator is not used for classes of loans that comprise the consumer portfolio segment. Management believes that there is a moderate likelihood of some loss related to those loans that are considered special mention.
Classified: | Classified (a) Substandard – Loans inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the company will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard loans, does not have to exist in individual loans classified substandard.
| Classified (b) Doubtful – Loans that have all the weaknesses inherent in a loan classified substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work to the advantage and strengthening of the assets, its classification as an estimated loss is deferred until its more exact status may be determined.
The Company’s credit quality indicators are updated on an ongoing basis along with our credits rated watch or below reviews. The following table presents by class and by credit quality indicator, the recorded investment in the Company’s loans and leases as of December 31, 2022 and 2021. The data is further defined by year of loan origination.
December 31, 2022 (dollars in thousands) |  | Prior |  | 2018 |  | 2019 |  | 2020 |  | 2021 |  | 2022 |  | Revolving Loans Amort. Cost Basis |  | Revolving Loans Convert. to Term |  | Total
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 177,307 |  |  | $ | 45,510 |  |  | $ | 56,011 |  |  | $ | 60,010 |  |  | $ | 234,258 |  |  | $ | 143,636 |  |  | $ | 708,201 |  |  | $ | 8,570 |  |  | $ | 1,433,503 |
Watch |  | 6,022 |  |  | 1,883 |  |  | 250 |  |  | 4,153 |  |  | 2,888 |  |  | 754 |  |  | 27,889 |  |  | — |  |  | 43,839 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 82 |  |  | 5,475 |  |  | — |  |  | 5,557 |
Substandard |  | 1,332 |  |  | 351 |  |  | 276 |  |  | — |  |  | — |  |  | — |  |  | 1,344 |  |  | 1,147 |  |  | 4,450 |
Total |  | 184,661 |  |  | 47,744 |  |  | 56,537 |  |  | 64,163 |  |  | 237,146 |  |  | 144,472 |  |  | 742,909 |  |  | 9,717 |  |  | 1,487,349 |
PPP loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | — |  |  | — |  |  | — |  |  | 2,479 |  |  | 777 |  |  | — |  |  |  |  |  |  | 3,256 |
Total |  | — |  |  | — |  |  | — |  |  | 2,479 |  |  | 777 |  |  | — |  |  | — |  |  | — |  |  | 3,256 |
Income producing - commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 778,683 |  |  | 434,031 |  |  | 480,474 |  |  | 298,458 |  |  | 542,143 |  |  | 744,328 |  |  | 192,089 |  |  | 358 |  |  | 3,470,564 |
Watch |  | 237,846 |  |  | 5,190 |  |  | — |  |  | 35,707 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 278,743 |
Special Mention |  | 44,195 |  |  | 5,206 |  |  | 4,209 |  |  | 6,735 |  |  | — |  |  | — |  |  | 47,676 |  |  | — |  |  | 108,021 |
Substandard |  | 60,613 |  |  | 2,000 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 62,613 |
Total |  | 1,121,337 |  |  | 446,427 |  |  | 484,683 |  |  | 340,900 |  |  | 542,143 |  |  | 744,328 |  |  | 239,765 |  |  | 358 |  |  | 3,919,941 |
Owner occupied - commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 444,153 |  |  | 180,142 |  |  | 106,902 |  |  | 40,562 |  |  | 206,595 |  |  | 41,765 |  |  | 24,181 |  |  | 13,238 |  |  | 1,057,538 |
Watch |  | 16,876 |  |  | 11,504 |  |  | 4,595 |  |  | — |  |  | — |  |  | — |  |  | 59 |  |  | — |  |  | 33,034 |
Substandard |  | 19,753 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 19,753 |
Total |  | 480,782 |  |  | 191,646 |  |  | 111,497 |  |  | 40,562 |  |  | 206,595 |  |  | 41,765 |  |  | 24,240 |  |  | 13,238 |  | 0 | 1,110,325 |
Real estate mortgage - residential |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 13,930 |  |  | 12,438 |  |  | 8,219 |  |  | 2,640 |  |  | 16,307 |  |  | 14,731 |  |  | — |  |  | — |  |  | 68,265 |
Watch |  | 3,038 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,038 |
Substandard |  | 1,698 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,698 |
Total |  | 18,666 |  |  | 12,438 |  |  | 8,219 |  |  | 2,640 |  |  | 16,307 |  |  | 14,731 |  |  | — |  |  | — |  |  | 73,001 |
Construction - commercial and residential |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 40,113 |  |  | 18,669 |  |  | 90,560 |  |  | 189,023 |  |  | 191,127 |  |  | 159,771 |  |  | 90,911 |  |  | — |  |  | 780,174 |
Watch |  | 44,409 |  |  | 53,172 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 97,581 |
Total |  | 84,522 |  |  | 71,841 |  |  | 90,560 |  |  | 189,023 |  |  | 191,127 |  |  | 159,771 |  |  | 90,911 |  |  | — |  |  | 877,755 |
Construction - C&I (owner occupied) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 13,792 |  |  | 4,906 |  |  | 4,367 |  |  | 33,854 |  |  | 653 |  |  | 34,679 |  |  | 6,507 |  |  | — |  |  | 98,758 |
Watch |  | 1,024 |  |  | 3,254 |  |  | 7,443 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 11,721 |
Total |  | 14,816 |  |  | 8,160 |  |  | 11,810 |  |  | 33,854 |  |  | 653 |  |  | 34,679 |  |  | 6,507 |  |  | — |  |  | 110,479 |
Home Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 1,695 |  |  | — |  |  | — |  |  | 98 |  |  | 551 |  |  | — |  |  | 48,182 |  |  | 906 |  |  | 51,432 |
Watch |  | 52 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 196 |  |  | — |  |  | 248 |
Substandard |  | — |  |  | — |  |  | 41 |  |  | — |  |  | — |  |  | — |  |  | 61 |  |  | — |  |  | 102 |
Total |  | 1,747 |  |  | — |  |  | 41 |  |  | 98 |  |  | 551 |  |  | — |  |  | 48,439 |  |  | 906 |  |  | 51,782 |
Other Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 4 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 126 |  |  | 1,561 |  |  | 3 |  |  | 1,694 |
Watch |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 50 |  |  | 50 |
Total |  | 4 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 126 |  |  | 1,561 |  |  | 53 |  |  | 1,744 |
Total Recorded Investment |  | $ | 1,906,535 |  |  | $ | 778,256 |  |  | $ | 763,347 |  |  | $ | 673,719 |  |  | $ | 1,195,299 |  |  | $ | 1,139,872 |  |  | $ | 1,154,332 |  |  | $ | 24,272 |  |  | $ | 7,635,632 |
December 31, 2021 (dollars in thousands) |  | Prior |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  | 2021 |  | Revolving Loans Amort. Cost Basis |  | Revolving Loans Convert. to Term |  | Total
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 180,877 |  |  | $ | 58,693 |  |  | $ | 103,058 |  |  | $ | 90,874 |  |  | $ | 87,515 |  |  | $ | 211,563 |  |  | $ | 549,055 |  |  | $ | 6,023 |  |  | $ | 1,287,658 |
Watch |  | 5,896 |  |  | 6,567 |  |  | 1,020 |  |  | 996 |  |  | 4,268 |  |  | 3,137 |  |  | 18,336 |  |  | 627 |  |  | 40,847 |
Special Mention |  | — |  |  | 9,515 |  |  | 363 |  |  | — |  |  | — |  |  | — |  |  | 901 |  |  | — |  |  | 10,779 |
Substandard |  | 4,205 |  |  | 778 |  |  | 1,850 |  |  | 437 |  |  | — |  |  | — |  |  | 7,763 |  |  | — |  |  | 15,033 |
Total |  | 190,978 |  |  | 75,553 |  |  | 106,291 |  |  | 92,307 |  |  | 91,783 |  |  | 214,700 |  |  | 576,055 |  |  | 6,650 |  |  | 1,354,317 |
PPP loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | — |  |  | — |  |  | — |  |  | — |  |  | 16,840 |  |  | 32,900 |  |  | — |  |  | — |  |  | 49,740 |
|  | — |  |  | — |  |  | — |  |  | — |  |  | 1,365 |  |  | — |  |  | — |  |  | — |  |  | 1,365 |
Total |  | — |  |  | — |  |  | — |  |  | — |  |  | 18,205 |  |  | 32,900 |  |  | — |  |  | — |  |  | 51,105 |
Income producing - commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 572,550 |  |  | 333,394 |  |  | 418,489 |  |  | 495,808 |  |  | 337,178 |  |  | 549,356 |  |  | 198,210 |  |  | — |  |  | 2,904,985 |
Watch |  | 58,334 |  |  | 73,760 |  |  | — |  |  | 43,561 |  |  | 35,094 |  |  | — |  |  | — |  |  | — |  |  | 210,749 |
Special Mention |  | 101,580 |  |  | — |  |  | 41,936 |  |  | 4,264 |  |  | — |  |  | — |  |  | 47,692 |  |  | — |  |  | 195,472 |
Substandard |  | 60,059 |  |  | — |  |  | 8,491 |  |  | 5,542 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 74,092 |
Total |  | 792,523 |  |  | 407,154 |  |  | 468,916 |  |  | 549,175 |  |  | 372,272 |  |  | 549,356 |  |  | 245,902 |  |  | — |  |  | 3,385,298 |
Owner occupied - commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 353,471 |  |  | 127,687 |  |  | 210,348 |  |  | 81,604 |  |  | 41,135 |  |  | 184,529 |  |  | 16,838 |  |  | 1,922 |  |  | 1,017,534 |
Watch |  | 22,710 |  |  | 4,581 |  |  | 11,783 |  |  | 7,026 |  |  | — |  |  | — |  |  | 62 |  |  | — |  |  | 46,162 |
Special Mention |  | — |  |  | — |  |  | — |  |  | 2,122 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,122 |
Substandard |  | 21,958 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 21,958 |
Total |  | 398,139 |  |  | 132,268 |  |  | 222,131 |  |  | 90,752 |  |  | 41,135 |  |  | 184,529 |  |  | 16,900 |  |  | 1,922 |  |  | 1,087,776 |
Real estate mortgage - residential |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 14,645 |  |  | 5,854 |  |  | 12,956 |  |  | 15,546 |  |  | 3,436 |  |  | 16,495 |  |  | — |  |  | — |  |  | 68,932 |
Watch |  | 3,255 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,255 |
Substandard |  | 1,698 |  |  | — |  |  | — |  |  | 81 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,779 |
Total |  | 19,598 |  |  | 5,854 |  |  | 12,956 |  |  | 15,627 |  |  | 3,436 |  |  | 16,495 |  |  | — |  |  | — |  |  | 73,966 |
Construction - commercial and residential |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 32,815 |  |  | 139,756 |  |  | 171,152 |  |  | 142,599 |  |  | 160,952 |  |  | 71,799 |  |  | 127,956 |  |  | 1,773 |  |  | 848,802 |
Watch |  | 506 |  |  | 43,918 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 44,424 |
Substandard |  | — |  |  | — |  |  | — |  |  | 3,093 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,093 |
Total |  | 33,321 |  |  | 183,674 |  |  | 171,152 |  |  | 145,692 |  |  | 160,952 |  |  | 71,799 |  |  | 127,956 |  |  | 1,773 |  |  | 896,319 |
Construction - C&I (owner occupied) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 19,710 |  |  | 1,754 |  |  | 25,163 |  |  | 39,803 |  |  | 61,408 |  |  | 768 |  |  | 6,648 |  |  | — |  |  | 155,254 |
Watch |  | 680 |  |  | 390 |  |  | 3,255 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,325 |
Total |  | 20,390 |  |  | 2,144 |  |  | 28,418 |  |  | 39,803 |  |  | 61,408 |  |  | 768 |  |  | 6,648 |  |  | — |  |  | 159,579 |
Home Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 1,474 |  |  | — |  |  | — |  |  | — |  |  | 70 |  |  | 702 |  |  | 52,077 |  |  | 883 |  |  | 55,206 |
Watch |  | 193 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 193 |
Substandard |  | 46 |  |  | — |  |  | — |  |  | 45 |  |  | — |  |  | — |  |  | 58 |  |  | 263 |  |  | 412 |
Total |  | 1,713 |  |  | — |  |  | — |  |  | 45 |  |  | 70 |  |  | 702 |  |  | 52,135 |  |  | 1,146 |  |  | 55,811 |
Other Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 370 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,002 |  |  | — |  |  | 1,372 |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 55 |  |  | — |  |  | 55 |
Total |  | 370 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,057 |  |  | — |  |  | 1,427 |
Total Recorded Investment |  | $ | 1,457,032 |  |  | $ | 806,647 |  |  | $ | 1,009,864 |  |  | $ | 933,401 |  |  | $ | 749,261 |  |  | $ | 1,071,249 |  |  | $ | 1,026,653 |  |  | $ | 11,491 |  |  | $ | 7,065,598 |
Nonaccrual and Past Due Loans Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The following table presents, by class of loan, information related to nonaccrual loans as of December 31, 2022 and 2021.
|  | December 31, 2022
(dollars in thousands) |  | Nonaccrual with No Allowance for Credit Loss |  | Nonaccrual with an Allowance for Credit Losses |  | Total Nonaccrual Loans
Commercial |  | $ | 101 |  |  | $ | 2,387 |  |  | $ | 2,488 |
Income producing - commercial real estate |  | — |  |  | 2,000 |  |  | 2,000 |
Owner occupied - commercial real estate |  | 17 |  |  | — |  |  | 17 |
Real estate mortgage - residential |  | — |  |  | 1,913 |  |  | 1,913 |
Other Consumer |  | — |  |  | 50 |  |  | 50 |
Total nonaccrual loans (1)(2) (3) |  | $ | 118 |  |  | $ | 6,350 |  |  | $ | 6,468 |
|  | December 31, 2021
(dollars in thousands) |  | Nonaccrual with No Allowance for Credit Loss |  | Nonaccrual with an Allowance for Credit Losses |  | Total Nonaccrual Loans
Commercial |  | $ | 5,806 |  |  | $ | 3,070 |  |  | $ | 8,876 |
PPP |  | 1,365 |  |  | — |  |  | 1,365 |
Income producing - commercial real estate |  | 3,920 |  |  | 9,536 |  |  | 13,456 |
Owner occupied - commercial real estate |  | 42 |  |  | — |  |  | 42 |
Real estate mortgage - residential |  | 1,779 |  |  | 231 |  |  | 2,010 |
Construction - commercial and residential |  | 3,093 |  |  | — |  |  | 3,093 |
Home equity |  | 366 |  |  | — |  |  | 366 |
Total nonaccrual loans (1)(2) (3) |  | $ | 16,371 |  |  | $ | 12,837 |  |  | $ | 29,208 |
(1)Excludes TDRs that were performing under their restructured terms totaling $24.4 million at December 31, 2022 and $10.2 million at December 31, 2021. (2)Gross interest income of $0.6 million, $1.7 million and $3.7 million would have been recorded for 2022, 2021 and 2020, respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while interest actually recorded on such loans were $17 thousand, $101 thousand and $679 thousand at December 31, 2022 2021 and 2020, respectively. See Note 1 to the Consolidated Financial Statements for a description of the Company’s policy for placing loans on nonaccrual status. (3)The CARES Act created the PPP, a program designed to aid small- and medium-sized businesses through federally guaranteed loans distributed through banks. These loans are intended to guarantee payroll and other costs to help those businesses remain viable and allow their workers to pay their bills. The following table presents, by class of loan, an aging analysis and the recorded investments in loans past due as of December 31, 2022 and 2021.
(dollars in thousands) |  | Loans 30-59 Days Past Due |  | Loans 60-89 Days Past Due |  | Loans 90 Days or More Past Due |  | Total Past Due Loans |  | Current Loans |  | Nonaccrual Loans |  | Total Recorded Investment in Loans
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | $ | 697 |  |  | $ | 643 |  |  | $ | — |  |  | $ | 1,340 |  |  | $ | 1,483,521 |  |  | $ | 2,488 |  |  | $ | 1,487,349 |
PPP loans |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,256 |  |  | — |  |  | 3,256 |
Income producing - commercial real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,917,941 |  |  | 2,000 |  |  | 3,919,941 |
Owner occupied - commercial real estate |  | — |  |  | 279 |  |  | — |  |  | 279 |  |  | 1,110,029 |  |  | 17 |  |  | 1,110,325 |
Real estate mortgage – residential |  | — |  |  | — |  |  | — |  |  | — |  |  | 71,088 |  |  | 1,913 |  |  | 73,001 |
Construction - commercial and residential |  | 531 |  |  | — |  |  | — |  |  | 531 |  |  | 877,224 |  |  | — |  |  | 877,755 |
Construction - C&I (owner occupied) |  | — |  |  | — |  |  | — |  |  | — |  |  | 110,479 |  |  | — |  |  | 110,479 |
Home equity |  | — |  |  | 52 |  |  | — |  |  | 52 |  |  | 51,730 |  |  | — |  |  | 51,782 |
Other consumer |  | — |  |  | 1 |  |  | — |  |  | 1 |  |  | 1,693 |  |  | 50 |  |  | 1,744 |
Total |  | $ | 1,228 |  |  | $ | 975 |  |  | $ | — |  |  | $ | 2,203 |  |  | $ | 7,626,961 |  |  | $ | 6,468 |  |  | $ | 7,635,632 |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | $ | 1,462 |  |  | $ | 672 |  |  | $ | — |  |  | $ | 2,134 |  |  | $ | 1,343,307 |  |  | $ | 8,876 |  |  | $ | 1,354,317 |
PPP loans |  | 1,765 |  |  | 825 |  |  | — |  |  | 2,590 |  |  | 47,150 |  |  | 1,365 |  |  | 51,105 |
Income producing - commercial real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,371,842 |  |  | 13,456 |  |  | 3,385,298 |
Owner occupied - commercial real estate |  | 419 |  |  | 19,108 |  |  | — |  |  | 19,527 |  |  | 1,068,207 |  |  | 42 |  |  | 1,087,776 |
Real estate mortgage – residential |  | 1,372 |  |  | — |  |  | — |  |  | 1,372 |  |  | 70,584 |  |  | 2,010 |  |  | 73,966 |
Construction - commercial and residential |  | — |  |  | — |  |  | — |  |  | — |  |  | 893,226 |  |  | 3,093 |  |  | 896,319 |
Construction - C&I (owner occupied) |  | — |  |  | — |  |  | — |  |  | — |  |  | 159,579 |  |  | — |  |  | 159,579 |
Home equity |  | 33 |  |  | 187 |  |  | — |  |  | 220 |  |  | 55,225 |  |  | 366 |  |  | 55,811 |
Other consumer |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,427 |  |  | — |  |  | 1,427 |
Total |  | $ | 5,051 |  |  | $ | 20,792 |  |  | $ | — |  |  | $ | 25,843 |  |  | $ | 7,010,547 |  |  | $ | 29,208 |  |  | $ | 7,065,598 |
Loan Modifications A modification of a loan constitutes a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Company offers various types of concessions when modifying a loan. Commercial and industrial loans modified in a TDR often involve temporary interest-only payments, term extensions and converting revolving credit lines to term loans. Additional collateral, a co-borrower or a guarantor is often requested. Commercial mortgage and construction loans modified in a TDR often involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk or substituting or adding a new borrower or guarantor. Construction loans modified in a TDR may also involve extending the interest-only payment period. As of December 31, 2022, all performing TDRs were categorized as interest-only modifications. Loans modified in a TDR for the Company may have the financial effect of increasing the specific allowance associated with the loan. An allowance for consumer and commercial loans that have been modified in a TDR is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. Management exercises significant judgment in developing these estimates. In response to the COVID-19 pandemic and its economic impact to our customers, we implemented a short-term modification program that complies with the CARES Act and ASC 310-40 to provide temporary payment relief to those borrowers directly impacted by COVID-19 who were not more than 30 days past due as of December 31, 2019. This program allowed for a deferral of payments for 90 days, which we extended for an additional 90 days for certain loans, for a maximum of 180 days on a cumulative and successive basis. The deferred payments along with interest accrued during the deferral period are due and payable on the maturity date. Additionally, none of the deferrals are reflected in the Company's asset quality measures (i.e. non-performing loans) due to the provision of the CARES Act that permits U.S. financial institutions to temporarily suspend the GAAP requirements to treat such short-term loan modifications as TDR. Similar provisions have also been confirmed by interagency guidance issued by the federal banking agencies and confirmed with staff members of the Financial Accounting Standards Board. The outstanding balance of loans with active COVID-related modifications, that were not considered TDRs under the Coronavirus Aid, Relief, and Economic Security Act, as amended by Section 541 of the Consolidated Appropriations Act, totaled $0 and $13.3 million at December 31, 2022 and 2021, respectively. The following tables present, by class, the recorded investment of loans modified in TDRs held by the Company during the years ended December 31, 2022, 2021, and 2020.
|  | As of December 31, 2022
(dollars in thousands) |  | Number of Contracts |  | Commercial |  | Income Producing - Commercial Real Estate |  | Owner Occupied - Commercial Real Estate |  | Construction - Commercial Real Estate |  | Total
Troubled debt restructurings |  |  |  |  |  |  |  |  |  |  |  |
Restructured accruing |  | 5 |  |  | $ | 946 |  |  | $ | 4,328 |  |  | $ | 19,170 |  |  | $ | — |  |  | $ | 24,444 |
Restructured nonaccruing |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | — |
Total |  | 5 |  |  | $ | 946 |  |  | $ | 4,328 |  |  | $ | 19,170 |  |  | $ | — |  |  | $ | 24,444 |
Specific allowance |  |  |  | $ | 87 |  |  | $ | 2,140 |  |  |  |  |  |  | $ | 2,227 |
Restructured and subsequently defaulted |  |  |  | $ | — |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |
|  | As of December 31, 2021
(dollars in thousands) |  | Number of Contracts |  | Commercial |  | Income Producing - Commercial Real Estate |  | Owner Occupied - Commercial Real Estate |  | Construction - Commercial Real Estate |  | Total
Troubled debt restructurings |  |  |  |  |  |  |  |  |  |  |  |
Restructured accruing |  | 5 |  |  | $ | 1,043 |  |  | $ | 9,116 |  |  | $ | — |  |  | $ | — |  |  | $ | 10,159 |
Restructured nonaccruing |  | 2 |  |  | — |  |  | 6,342 |  |  | — |  |  | — |  |  | 6,342 |
Total |  | 7 |  |  | $ | 1,043 |  |  | $ | 15,458 |  |  | $ | — |  |  | $ | — |  |  | $ | 16,501 |
Specific allowance |  |  |  | $ | 140 |  |  | $ | 3,216 |  |  |  |  |  |  | $ | 3,356 |
Restructured and subsequently defaulted |  |  |  | $ | — |  |  | $ | 6,342 |  |  | $ | — |  |  | $ | — |  |  | $ | 6,342 |
|  | As of December 31, 2020
(dollars in thousands) |  | Number of Contracts |  | Commercial |  | Income Producing - Commercial Real Estate |  | Owner Occupied - Commercial Real Estate |  | Construction - Commercial Real Estate |  | Total
Troubled debt restructurings |  |  |  |  |  |  |  |  |  |  |  |
Restructured accruing |  | 7 |  |  | $ | 1,276 |  |  | $ | 9,183 |  |  | $ | 13 |  |  | $ | — |  |  | $ | 10,472 |
Restructured nonaccruing |  | 3 |  |  | — |  |  | 6,342 |  |  | 2,370 |  |  | — |  |  | 8,712 |
Total |  | 10 |  |  | $ | 1,276 |  |  | $ | 15,525 |  |  | $ | 2,383 |  |  | $ | — |  |  | $ | 19,184 |
Specific allowance |  |  |  | $ | 733 |  |  | $ | 2,989 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,722 |
Restructured and subsequently defaulted |  |  |  | $ | — |  |  | $ | 6,342 |  |  | $ | 2,370 |  |  | $ | — |  |  | $ | 8,712 |
During 2022, no TDRs defaulted on their modified terms that were reclassified to nonperforming loans, as compared to one performing TDR loans during 2021 totaling approximately $101 thousand that defaulted on their modified terms and either charged-off or were reclassified to nonperforming loans. During 2020, two performing TDR loans totaling approximately $6.3 million that defaulted on their modified terms and either charged-off or were reclassified to nonperforming loans. A default is considered to have occurred once the TDR is past due 90 days or more, or has been placed on nonaccrual. At December 31, 2022, all five TDR loans, totaling $24.4 million, were performing under their modified terms, as compared to December 31, 2021, when there were five of TDR loans, totaling $10.2 million, performing under their modified terms, and December 31, 2020, when there were seven performing TDR loans totaling approximately $10.5 million. During 2022, three restructured loans, two of which totaling approximately $11.1 million that had their collateral property sold to a third party and a charge off of $1.4 million was recognized on the sale. During 2021, one previously nonperforming restructured loan had its collateral sold and all principal collected along with partial collection of delinquent interest; one restructured loan purchased as part of the 2014 acquisition of Virginia Heritage Bank had its full carrying value collected, while additional payments are expected to recover previously written off principal and interest; and, the aforementioned performing TDR totaling $101 thousand that defaulted in 2021 was subsequently charged off later in the year. During 2020, there were two restructured loans totaling approximately $870 thousand that had their collateral property sold and were paid in full, and one TDR loan totaling $138 thousand that had previously defaulted was charged off. Commercial and consumer loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a TDR subsequently default, the Company evaluates the loan for possible further loss. The allowance may be increased, adjustments may be made in the allocation of the allowance or partial charge-offs may be taken to further write-down the carrying value of the loan. During 2022, there was one loan totaling $19.2 million that was modified in a TDR, during 2021, there were no loans modified in a TDR, and during 2020, there were two loans totaling $572 thousand. Related Party Loans Certain directors and executive officers of the Company and the Bank and certain affiliated entities of such directors and executive officers have had loan transactions with the Company. All of such loans are either fully repaid or performing and none of such loans are nonaccrual, past due, restructured or, rated substandard or worse (not on nonaccrual). The following table summarizes changes in amounts of loans outstanding, both direct and indirect, to those persons during 2022 and 2021. Amounts in the “Additions due to Changes in Related Parties” reflect existing outstanding loans that transitioned to being related party loans between January 1, 2022 and December 31, 2022 as a result of changes in related party status with respect to certain of the Company’s directors who are affiliated with the related borrowers.
(dollars in thousands) |  | 2022 |  | 2021
Balance at January 1, |  | $ | 150,822 |  |  | $ | 72,956 |
Additions |  | 173 |  |  | 301 |
Repayments |  | (33,220) |  |  | (4,750) |
Additions due to Changes in Related Parties |  | 1,423 |  |  | 82,315 |
Balance at December 31, |  | $ | 119,198 |  |  | $ | 150,822 |

X
- 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
Name: | us-gaap_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_ReceivablesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration