Allowance for Credit Losses on Loans

Schedule of changes in allowance for loan (credit) losses


	Year Ended December 31, 2020
			Owner		Non-owner		Land &		Home		Multi-		Residential		Consumer
	Commercial		Occupied		Occupied		Construction		Equity		Family		Mortgage		and Other		Total

	(Dollars in thousands)
Beginning of period balance	$	10,453	$	3,825	$	3,760	$	2,621	$	2,244	$	57	$	243	$	82	$	23,285
Adoption of Topic 326		(3,663)		3,169		7,912		(1,163)		(923)		1,196		435		1,607		8,570
Balance at adoption on January 1, 2020		6,790		6,994		11,672		1,458		1,321		1,253		678		1,689		31,855
Charge-offs		(1,776)		—		—		—		—		—		—		(104)		(1,880)
Recoveries		998		1		—		70		93		—		—		30		1,192
Net (charge-offs) recoveries		(778)		1		—		70		93		—		—		(74)		(688)
Provision (credit) for credit losses on loans		5,575		1,565		4,744		981		(117)		1,551		265		(1,331)		13,233
End of period balance	$	11,587	$	8,560	$	16,416	$	2,509	$	1,297	$	2,804	$	943	$	284	$	44,400


	Year Ended December 31, 2019
	Commercial		Real Estate		Consumer		Total

	(Dollars in thousands)
Beginning of period balance	$	17,061	$	10,671	$	116	$	27,848
Charge-offs		(6,609)		—		(14)		(6,623)
Recoveries		1,045		169		—		1,214
Net recoveries		(5,564)		169		(14)		(5,409)
Provision (credit) for loan losses		(1,044)		1,910		(20)		846
End of period balance	$	10,453	$	12,750	$	82	$	23,285


	Year Ended December 31, 2018
	Commercial		Real Estate		Consumer		Total

	(Dollars in thousands)
Beginning of period balance	$	10,608	$	8,950	$	100	$	19,658
Charge-offs		(2,002)		—		(24)		(2,026)
Recoveries		2,645		150		—		2,795
Net recoveries		643		150		(24)		769
Provision for loan losses		5,810		1,571		40		7,421
End of period balance	$	17,061	$	10,671	$	116	$	27,848

Schedule of nonperforming loans


						Restructured
	Nonaccrual		Nonaccrual			and Loans
	with no Specific		with Specific			over 90 Days
	Allowance for		Allowance for			Past Due
	Credit		Credit			and Still
	Losses		Losses			Accruing	Total

	(Dollars in thousands)
Commercial	$	752	$	1,974	$	81	$	2,807
Real estate:
CRE - Owner Occupied		3,706		—		—		3,706
Home equity		949		—		—		949
Consumer and other		407				—		407
Total	$	5,814	$	1,974	$	81	$	7,869


			Restructured
			and Loans
			over 90 Days
			Past Due
			and Still
	Nonaccrual		Accruing		Total

	(Dollars in thousands)
Commercial	$	3,444	$	1,153	$	4,597
Real estate:
CRE		5,094		—		5,094
Home equity		137		—		137
Total	$	8,675	$	1,153	$	9,828

Summary of loan portfolio by loan type and credit quality classification


														Revolving
														Loans
		Term Loans Amortized Cost Basis by Originated Period												Amortized
												2015 and		Cost
		2020		2019		2018		2017		2016		Prior		Basis		Total

	(Dollars in thousands)
Commercial:
Pass	$	431,369	$	33,350	$	21,154	$	13,840	$	7,341	$	8,292	$	296,286	$	811,632
Special Mention		15,720		716		1,301		953		713		170		1,937		21,510
Substandard		4,036		-		19		758		2,396		73		3,236		10,518
Substandard-Nonaccrual		2,106		56		36		-		115		26		387		2,726
Total		453,231		34,122		22,510		15,551		10,565		8,561		301,846		846,386

CRE - Owner Occupied:
Pass		168,224		73,064		68,068		51,705		50,716		109,350		15,964		537,091
Special Mention		3,151		2,568		4,128		783		-		2,569		-		13,199
Substandard		2,561		-		400		2,954		-		451		-		6,366
Substandard-Nonaccrual		3,678		-		-		-		-		28		-		3,706
Total		177,614		75,632		72,596		55,442		50,716		112,398		15,964		560,362

CRE - Non-Owner Occupied:
Pass		166,550		128,361		68,796		99,816		57,422		150,683		1,926		673,554
Special Mention		11,930		-		2,557		-		-		-		-		14,487
Substandard		3,166		-		1,411		-		485		-		-		5,062
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		181,646		128,361		72,764		99,816		57,907		150,683		1,926		693,103

Land and construction:
Pass		114,932		22,054		-		-		-		1,343		4,906		143,235
Special Mention		-		-		-		-		-		-		-		-
Substandard		1,359		-		-		-		-		-		-		1,359
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		116,291		22,054		-		-		-		1,343		4,906		144,594

Home equity:
Pass		266		-		74		-		-		-		109,848		110,188
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		143		605		748
Substandard-Nonaccrual		117		-		-		-		-		-		832		949
Total		383		-		74		-		-		143		111,285		111,885

Multifamily:
Pass		31,481		39,183		17,248		24,572		16,235		30,751		880		160,350
Special Mention		-		-		-		-		-		5,186		-		5,186
Substandard		889		-		-		-		-		-		-		889
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		32,370		39,183		17,248		24,572		16,235		35,937		880		166,425

Residential mortgage:
Pass		12,798		10,048		3,246		7,324		28,115		15,568		-		77,099
Special Mention		5,089		-		1,630		-				-		-		6,719
Substandard		-		-		-		-		-		1,298		-		1,298
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		17,887		10,048		4,876		7,324		28,115		16,866		-		85,116

Consumer and other:
Pass		10		522		1,486		20		116		987		14,568		17,709
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-
Substandard-Nonaccrual		-		-		407		-		-		-		-		407
Total		10		522		1,893		20		116		987		14,568		18,116

Total loans	$	979,432	$	309,922	$	191,961	$	202,725	$	163,654	$	326,918	$	451,375	$	2,625,987

Risk Grades:.
Pass	$	925,630	$	306,582	$	180,072	$	197,277	$	159,945	$	316,974	$	444,378	$	2,530,858
Special Mention		35,890		3,284		9,616		1,736		713		7,925		1,937		61,101
Substandard		12,011		-		1,830		3,712		2,881		1,965		3,841		26,240
Substandard-Nonaccrual		5,901		56		443		-		115		54		1,219		7,788
Grand Total	$	979,432	$	309,922	$	191,961	$	202,725	$	163,654	$	326,918	$	451,375	$	2,625,987


	December 31, 2019
	Nonclassified		Classified		Total

Commercial	$	599,143		4,202	$	603,345
Real estate:
CRE - Owner Occupied		538,229		10,678		548,907
CRE - Non-Owner Occupied		761,801		6,020		767,821
Land and construction		144,108		3,081		147,189
Home equity		149,131		2,644		151,775
Multifamily		180,623		—		180,623
Residential mortgages		100,262		497		100,759
Consumer and other		28,287		5,457		33,744
Total	$	2,501,584	$	32,579	$	2,534,163

Schedule of balance in allowance for loan losses and recorded investment in loans individually evaluated, based on impairment method



					Allowance
	Unpaid				for Loan
	Principal		Recorded		Losses
	Balance		Investment		Allocated

	(Dollars in thousands)
With no related allowance recorded:
Commercial	$	2,113	$	2,113	$	—
Real estate:
CRE		5,094		5,094		—
Home Equity		360		360		—
Total with no related allowance recorded		7,567		7,567		—

With an allowance recorded:
Commercial		2,697		2,697		1,835
Total with an allowance recorded		2,697		2,697		1,835
Total	$	10,264	$	10,264	$	1,835

Schedule of loan deferrals by loan category


	Underlying Collateral
		Business		Real
		Assets		Estate		Total

(in $000's, unaudited)
Initial Deferments⁽¹⁾	$	-	$	1,573	$	1,573
2nd Deferments⁽²⁾		295		684		979
Total	$	295	$	2,257	$	2,552

⁽¹⁾Initial deferments were generally for 3 months
⁽²⁾ 2nd deferments were for an additional 3 months