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Loans and Allowance for Loan Losses | 12 Months Ended
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Dec. 31, 2022
Loans and Allowance for Loan Losses |
Loans and Allowance for Loan Losses | NOTE 6 Loans and Allowance for Loan Losses The following table presents total loans outstanding, by portfolio segment, as of December 31, 2022 and 2021: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | December 31, |  | December 31,
(dollars in thousands) |  | 2022 |  | 2021
Commercial | ​ | ​ | ​ | ​ | ​ | ​
Commercial and industrial (1) | ​ | $ | 583,876 | ​ | $ | 436,761
Real estate construction | ​ |  | 97,810 | ​ |  | 40,619
Commercial real estate | ​ |  | 881,670 | ​ |  | 598,893
Total commercial | ​ |  | 1,563,356 | ​ |  | 1,076,273
Consumer | ​ |  |  | ​ |  |
Residential real estate first mortgage | ​ |  | 679,551 | ​ |  | 510,716
Residential real estate junior lien | ​ |  | 150,479 | ​ |  | 125,668
Other revolving and installment | ​ |  | 50,608 | ​ |  | 45,363
Total consumer | ​ |  | 880,638 | ​ |  | 681,747
Total loans | ​ | $ | 2,443,994 | ​ | $ | 1,758,020
(1) | Includes PPP loans of $737 thousand at December 31, 2022 and $33.6 million at December 31, 2021.
​ Total loans include net deferred loan fees and costs of $919 thousand and $231 thousand at December 31, 2022 and 2021, respectively. Deferred loan fees on PPP loans were zero at December 31, 2022 and $881 thousand at December 31, 2021. Unearned discounts associated with the acquisition of Metro Phoenix Bank totaled $7.1 million as of December 31, 2022. As part of the acquisition of Metro Phoenix Bank, the Company acquired loans that displayed evidence of deterioration of credit quality since origination and which was probable that all contractually required payments would not be collected. The carrying amounts and contractually required payments of these loans which are included in the loan balances above are summarized in the following table: ​
​ | ​ | ​ | ​
​ | ​ | December 31,
(dollars in thousands) |  | 2022
Real estate construction |  | $ | 440
Outstanding balance | ​ | ​ | 440
Carrying amount | ​ | ​ | 262
Allowance for loan losses | ​ | ​ | 97
Carrying amount, net of allowance for loan losses | ​ | $ | 165
​ Accretable yield, or income expected to be collected, is shown in the table below: ​
​ | ​ | ​ | ​
​ | ​ | For the year ended
​ | ​ | December 31,
(dollars in thousands) |  | 2022
Beginning balance |  | $ | —
New loans purchased | ​ | ​ | 225
Accretion of income | ​ | ​ | (48)
Ending balance | ​ | $ | 177
​ Management monitors the credit quality of its loan portfolio on an ongoing basis. Measurement of delinquency and past due status are based on the contractual terms of each loan. Past due loans are reviewed regularly to identify loans for nonaccrual status. The following tables present past due aging analysis of total loans outstanding, by portfolio segment, as of December 31, 2022 and 2021, respectively: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2022
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 90 Days | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Accruing | ​ | 30 - 89 Days | ​ | or More | ​ | ​ | ​ | ​ | Total
(dollars in thousands) |  | Current |  | Past Due |  | Past Due |  | Nonaccrual |  | Loans
Commercial |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Commercial and industrial | ​ | $ | 580,288 | ​ | $ | 2,426 | ​ | $ | — | ​ | $ | 1,162 | ​ | $ | 583,876
Real estate construction | ​ |  | 97,370 | ​ |  | — | ​ |  | — | ​ |  | 440 | ​ |  | 97,810
Commercial real estate | ​ |  | 879,830 | ​ |  | 368 | ​ |  | — | ​ |  | 1,472 | ​ |  | 881,670
Total commercial | ​ |  | 1,557,488 | ​ |  | 2,794 | ​ |  | — | ​ |  | 3,074 | ​ |  | 1,563,356
Consumer | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Residential real estate first mortgage | ​ |  | 677,471 | ​ |  | 1,545 | ​ |  | — | ​ |  | 535 | ​ |  | 679,551
Residential real estate junior lien | ​ |  | 149,918 | ​ |  | 377 | ​ |  | — | ​ |  | 184 | ​ |  | 150,479
Other revolving and installment | ​ |  | 50,360 | ​ |  | 247 | ​ |  | — | ​ |  | 1 | ​ |  | 50,608
Total consumer | ​ |  | 877,749 | ​ |  | 2,169 | ​ |  | — | ​ |  | 720 | ​ |  | 880,638
Total loans | ​ | $ | 2,435,237 | ​ | $ | 4,963 | ​ | $ | — | ​ | $ | 3,794 | ​ | $ | 2,443,994
​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2021
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 90 Days | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Accruing | ​ | 30 - 89 Days | ​ | or More | ​ | ​ | ​ | ​ | Total
(dollars in thousands) |  | Current |  | Past Due |  | Past Due |  | Nonaccrual |  | Loans
Commercial | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Commercial and industrial | ​ | $ | 435,135 | ​ | $ | 168 | ​ | $ | 121 | ​ | $ | 1,337 | ​ | $ | 436,761
Real estate construction | ​ |  | 40,619 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 40,619
Commercial real estate | ​ |  | 598,264 | ​ |  | — | ​ |  | — | ​ |  | 629 | ​ |  | 598,893
Total commercial | ​ |  | 1,074,018 | ​ |  | 168 | ​ |  | 121 | ​ |  | 1,966 | ​ |  | 1,076,273
Consumer | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Residential real estate first mortgage | ​ |  | 508,925 | ​ |  | 1,770 | ​ |  | — | ​ |  | 21 | ​ |  | 510,716
Residential real estate junior lien | ​ |  | 125,412 | ​ |  | 167 | ​ |  | — | ​ |  | 89 | ​ |  | 125,668
Other revolving and installment | ​ |  | 45,242 | ​ |  | 121 | ​ |  | — | ​ |  | — | ​ |  | 45,363
Total consumer | ​ |  | 679,579 | ​ |  | 2,058 | ​ |  | — | ​ |  | 110 | ​ |  | 681,747
Total loans | ​ | $ | 1,753,597 | ​ | $ | 2,226 | ​ | $ | 121 | ​ | $ | 2,076 | ​ | $ | 1,758,020
​ The Company’s consumer loan portfolio is primarily comprised of both secured and unsecured loans that are relatively small and are evaluated at origination on a centralized basis against standardized underwriting criteria. The Company generally does not risk rate consumer loans unless a default event such as bankruptcy or extended nonperformance takes place. Credit quality for the consumer loan portfolio is measured by delinquency rates, nonaccrual amounts, and actual losses incurred. The Company assigns a risk rating to all commercial loans, except pools of homogeneous loans, and periodically performs detailed internal and external reviews of risk rated loans over a certain threshold to identify credit risks and to assess the overall collectability of the portfolio. These risk ratings are also subject to examination by the Company’s regulators. During the internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which the borrowers operate, and the estimated fair values of collateral securing the loans. These credit quality indicators are used to assign a risk rating to each individual loan. The Company’s ratings are aligned to pass and criticized categories. The criticized category includes special mention, substandard, and doubtful risk ratings. The risk ratings are defined as follows: Pass: A pass loan is a credit with no existing or known potential weaknesses deserving of management’s close attention. Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, this potential weakness may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. Substandard: Loans classified as substandard are not adequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. Well-defined weaknesses include a borrower’s lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time, or the failure to fulfill economic expectations. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loss: Loans classified as loss are considered uncollectible and charged off immediately. The tables below present total loans outstanding, by portfolio segment and risk category, as of December 31, 2022 and 2021: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2022
​ | ​ | ​ | ​ | ​ | Criticized | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Special | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(dollars in thousands) |  | Pass |  | Mention |  | Substandard |  | Doubtful |  | Total
Commercial |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Commercial and industrial | ​ | $ | 558,694 | ​ | $ | 21,969 | ​ | $ | 3,213 | ​ | $ | — | ​ | $ | 583,876
Real estate construction | ​ |  | 97,548 | ​ |  | — | ​ |  | 262 | ​ |  | — | ​ |  | 97,810
Commercial real estate | ​ |  | 873,270 | ​ |  | — | ​ |  | 8,400 | ​ |  | — | ​ |  | 881,670
Total commercial | ​ | ​ | 1,529,512 | ​ | ​ | 21,969 | ​ | ​ | 11,875 | ​ | ​ | — | ​ | ​ | 1,563,356
Consumer | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Residential real estate first mortgage | ​ |  | 678,743 | ​ |  | 63 | ​ |  | 745 | ​ |  | — | ​ |  | 679,551
Residential real estate junior lien | ​ |  | 149,847 | ​ |  | — | ​ |  | 632 | ​ |  | — | ​ |  | 150,479
Other revolving and installment | ​ |  | 50,607 | ​ |  | — | ​ |  | 1 | ​ |  | — | ​ |  | 50,608
Total consumer | ​ |  | 879,197 | ​ |  | 63 | ​ |  | 1,378 | ​ |  | — | ​ |  | 880,638
Total loans | ​ | $ | 2,408,709 | ​ | $ | 22,032 | ​ | $ | 13,253 | ​ | $ | — | ​ | $ | 2,443,994
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2021
​ | ​ | ​ | ​ | ​ | Criticized | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Special | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(dollars in thousands) |  | Pass |  | Mention |  | Substandard |  | Doubtful |  | Total
Commercial |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Commercial and industrial | ​ | $ | 430,235 | ​ | $ | 480 | ​ | $ | 6,046 | ​ | $ | — | ​ | $ | 436,761
Real estate construction | ​ |  | 40,619 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 40,619
Commercial real estate | ​ |  | 585,291 | ​ |  | — | ​ |  | 13,602 | ​ |  | — | ​ |  | 598,893
Total commercial | ​ | ​ | 1,056,145 | ​ | ​ | 480 | ​ | ​ | 19,648 | ​ | ​ | — | ​ | ​ | 1,076,273
Consumer | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Residential real estate first mortgage | ​ |  | 510,375 | ​ |  | — | ​ |  | 341 | ​ |  | — | ​ |  | 510,716
Residential real estate junior lien | ​ |  | 124,898 | ​ |  | — | ​ |  | 770 | ​ |  | — | ​ |  | 125,668
Other revolving and installment | ​ |  | 45,363 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 45,363
Total consumer | ​ |  | 680,636 | ​ |  | — | ​ |  | 1,111 | ​ |  | — | ​ |  | 681,747
Total loans | ​ | $ | 1,736,781 | ​ | $ | 480 | ​ | $ | 20,759 | ​ | $ | — | ​ | $ | 1,758,020
​ The adequacy of the allowance for loan losses is assessed at the end of each quarter. The allowance for loan losses includes a specific component related to loans that are individually evaluated for impairment and a general component related to loans that are segregated into homogeneous pool and collectively evaluated for impairment. The factors applied to these pools are an estimate of probable incurred losses based on management’s evaluation of historical net losses from loans with similar characteristics, which are adjusted by management to reflect current events, trends, and conditions. The adjustments include consideration of the following: changes in lending policies and procedures, economic conditions, nature and volume of the portfolio, experience of lending management, volume and severity of past due loans, quality of the loan review system, value of underlying collateral for collateral dependent loans, concentrations, and other external factors. The following tables present, by loan portfolio segment, a summary of the changes in the allowance for loan losses for the three years ending December 31, 2022, 2021, and 2020: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year ended December 31, 2022
​ | ​ | Beginning | ​ | Provision for | ​ | Loan | ​ | Loan | ​ | Ending
(dollars in thousands) |  | Balance |  | Loan Losses |  | Charge-offs |  | Recoveries |  | Balance
Commercial | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial and industrial | ​ | $ | 8,925 | ​ | $ | 1,168 | ​ | $ | (1,396) | ​ | $ | 461 | ​ | $ | 9,158
Real estate construction | ​ | ​ | 783 | ​ | ​ | 587 | ​ | ​ | — | ​ | ​ | 76 | ​ | ​ | 1,446
Commercial real estate | ​ | ​ | 12,376 | ​ | ​ | 178 | ​ | ​ | — | ​ | ​ | 134 | ​ | ​ | 12,688
Total commercial | ​ | ​ | 22,084 | ​ | ​ | 1,933 | ​ | ​ | (1,396) | ​ | ​ | 671 | ​ | ​ | 23,292
Consumer | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Residential real estate first mortgage | ​ | ​ | 6,532 | ​ | ​ | (763) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 5,769
Residential real estate junior lien | ​ | ​ | 1,295 | ​ | ​ | (288) | ​ | ​ | — | ​ | ​ | 282 | ​ | ​ | 1,289
Other revolving and installment | ​ | ​ | 481 | ​ | ​ | 30 | ​ | ​ | (153) | ​ | ​ | 170 | ​ | ​ | 528
Total consumer | ​ | ​ | 8,308 | ​ | ​ | (1,021) | ​ | ​ | (153) | ​ | ​ | 452 | ​ | ​ | 7,586
Unallocated | ​ | ​ | 1,180 | ​ | ​ | (912) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 268
Total | ​ | $ | 31,572 | ​ | $ | — | ​ | $ | (1,549) | ​ | $ | 1,123 | ​ | $ | 31,146
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year ended December 31, 2021
​ | ​ | Beginning | ​ | Provision for | ​ | Loan | ​ | Loan | ​ | Ending
(dollars in thousands) |  | Balance |  | Loan Losses |  | Charge-offs |  | Recoveries |  | Balance
Commercial | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Commercial and industrial | ​ | $ | 10,205 | ​ | $ | (1,710) | ​ | $ | (1,230) | ​ | $ | 1,660 | ​ | $ | 8,925
Real estate construction | ​ |  | 658 | ​ |  | 125 | ​ |  | — | ​ |  | — | ​ |  | 783
Commercial real estate | ​ |  | 14,105 | ​ |  | (2,015) | ​ |  | (536) | ​ |  | 822 | ​ |  | 12,376
Total commercial | ​ |  | 24,968 | ​ |  | (3,600) | ​ |  | (1,766) | ​ |  | 2,482 | ​ |  | 22,084
Consumer | ​ |  | ​ | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Residential real estate first mortgage | ​ |  | 5,774 | ​ |  | 758 | ​ |  | — | ​ |  | — | ​ |  | 6,532
Residential real estate junior lien | ​ |  | 1,373 | ​ |  | (201) | ​ |  | — | ​ | ​ | 123 | ​ |  | 1,295
Other revolving and installment | ​ |  | 753 | ​ |  | (259) | ​ |  | (156) | ​ |  | 143 | ​ |  | 481
Total consumer | ​ |  | 7,900 | ​ |  | 298 | ​ |  | (156) | ​ |  | 266 | ​ |  | 8,308
Unallocated | ​ |  | 1,378 | ​ |  | (198) | ​ |  | — | ​ |  | — | ​ |  | 1,180
Total | ​ | $ | 34,246 | ​ | $ | (3,500) | ​ | $ | (1,922) | ​ | $ | 2,748 | ​ | $ | 31,572
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year ended December 31, 2020
​ | ​ | Beginning | ​ | Provision for | ​ | Loan | ​ | Loan | ​ | Ending
(dollars in thousands) |  | Balance |  | Loan Losses |  | Charge-offs |  | Recoveries |  | Balance
Commercial | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Commercial and industrial | ​ | $ | 12,270 | ​ | $ | (2,168) | ​ | $ | (4,249) | ​ | $ | 4,352 | ​ | $ | 10,205
Real estate construction | ​ |  | 303 | ​ |  | 355 | ​ |  | — | ​ |  | — | ​ |  | 658
Commercial real estate | ​ |  | 6,688 | ​ |  | 8,185 | ​ |  | (865) | ​ |  | 97 | ​ |  | 14,105
Total commercial | ​ |  | 19,261 | ​ |  | 6,372 | ​ |  | (5,114) | ​ |  | 4,449 | ​ |  | 24,968
Consumer | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Residential real estate first mortgage | ​ |  | 1,448 | ​ |  | 4,321 | ​ |  | — | ​ |  | 5 | ​ |  | 5,774
Residential real estate junior lien | ​ |  | 671 | ​ |  | 507 | ​ |  | (12) | ​ |  | 207 | ​ |  | 1,373
Other revolving and installment | ​ |  | 352 | ​ |  | 514 | ​ |  | (242) | ​ |  | 129 | ​ |  | 753
Total consumer | ​ |  | 2,471 | ​ |  | 5,342 | ​ |  | (254) | ​ |  | 341 | ​ |  | 7,900
Unallocated | ​ |  | 2,192 | ​ |  | (814) | ​ |  | — | ​ |  | — | ​ |  | 1,378
Total | ​ | $ | 23,924 | ​ | $ | 10,900 | ​ | $ | (5,368) | ​ | $ | 4,790 | ​ | $ | 34,246
​ The following tables present the recorded investment in loans and related allowance for the loan losses, by portfolio segment, disaggregated on the basis of the Company’s impairment methodology, as of December 31, 2022 and 2021: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2022
​ | ​ | Recorded Investment | ​ | Allowance for Loan Losses
​ | ​ | Individually | ​ | Collectively | ​ | ​ | ​ | ​ | Individually | ​ | Collectively | ​ | ​ | ​
(dollars in thousands) |  | Evaluated |  | Evaluated |  | Total |  | Evaluated |  | Evaluated |  | Total
Commercial | ​ | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial and industrial | ​ | $ | 1,313 | ​ | $ | 582,563 | ​ | $ | 583,876 | ​ | $ | 275 | ​ | $ | 8,883 | ​ | $ | 9,158
Real estate construction | ​ |  | 262 | ​ |  | 97,548 | ​ |  | 97,810 | ​ | ​ | 97 | ​ | ​ | 1,349 | ​ | ​ | 1,446
Commercial real estate | ​ |  | 1,472 | ​ |  | 880,198 | ​ |  | 881,670 | ​ | ​ | 582 | ​ | ​ | 12,106 | ​ | ​ | 12,688
Total commercial | ​ |  | 3,047 | ​ |  | 1,560,309 | ​ |  | 1,563,356 | ​ | ​ | 954 | ​ | ​ | 22,338 | ​ | ​ | 23,292
Consumer | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Residential real estate first mortgage | ​ |  | 535 | ​ |  | 679,016 | ​ |  | 679,551 | ​ | ​ | — | ​ | ​ | 5,769 | ​ | ​ | 5,769
Residential real estate junior lien | ​ |  | 184 | ​ |  | 150,295 | ​ |  | 150,479 | ​ | ​ | — | ​ | ​ | 1,289 | ​ | ​ | 1,289
Other revolving and installment | ​ |  | 1 | ​ |  | 50,607 | ​ |  | 50,608 | ​ | ​ | — | ​ | ​ | 528 | ​ | ​ | 528
Total consumer | ​ |  | 720 | ​ |  | 879,918 | ​ |  | 880,638 | ​ | ​ | — | ​ | ​ | 7,586 | ​ | ​ | 7,586
Unallocated | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 268
Total loans | ​ | $ | 3,767 | ​ | $ | 2,440,227 | ​ | $ | 2,443,994 | ​ | $ | 954 | ​ | $ | 29,924 | ​ | $ | 31,146
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2021
​ | ​ | Recorded Investment | ​ | Allowance for Loan Losses
​ | ​ | Individually | ​ | Collectively | ​ | ​ | ​ | ​ | Individually | ​ | Collectively | ​ | ​ | ​
(dollars in thousands) |  | Evaluated |  | Evaluated |  | Total |  | Evaluated |  | Evaluated |  | Total
Commercial | ​ | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial and industrial | ​ | $ | 1,831 | ​ | $ | 434,930 | ​ | $ | 436,761 | ​ | $ | 278 | ​ | $ | 8,647 | ​ | $ | 8,925
Real estate construction | ​ |  | — | ​ |  | 40,619 | ​ |  | 40,619 | ​ | ​ | — | ​ | ​ | 783 | ​ | ​ | 783
Commercial real estate | ​ |  | 809 | ​ |  | 598,084 | ​ |  | 598,893 | ​ | ​ | 5 | ​ | ​ | 12,371 | ​ | ​ | 12,376
Total commercial | ​ |  | 2,640 | ​ |  | 1,073,633 | ​ |  | 1,076,273 | ​ | ​ | 283 | ​ | ​ | 21,801 | ​ | ​ | 22,084
Consumer | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Residential real estate first mortgage | ​ |  | 21 | ​ |  | 510,695 | ​ |  | 510,716 | ​ | ​ | — | ​ | ​ | 6,532 | ​ | ​ | 6,532
Residential real estate junior lien | ​ |  | 91 | ​ | ​ | 125,577 | ​ |  | 125,668 | ​ | ​ | — | ​ | ​ | 1,295 | ​ | ​ | 1,295
Other revolving and installment | ​ |  | — | ​ |  | 45,363 | ​ |  | 45,363 | ​ | ​ | — | ​ | ​ | 481 | ​ | ​ | 481
Total consumer | ​ |  | 112 | ​ |  | 681,635 | ​ |  | 681,747 | ​ | ​ | — | ​ | ​ | 8,308 | ​ | ​ | 8,308
Unallocated | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,180
Total loans | ​ | $ | 2,752 | ​ | $ | 1,755,268 | ​ | $ | 1,758,020 | ​ | $ | 283 | ​ | $ | 30,109 | ​ | $ | 31,572
​ The tables below summarize key information on impaired loans. These impaired loans may have estimated losses which are included in the allowance for loan losses. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2022 |  | December 31, 2021
​ | ​ | Recorded | ​ | Unpaid | ​ | Related |  | Recorded | ​ | Unpaid | ​ | Related
(dollars in thousands) |  | Investment |  | Principal |  | Allowance |  | Investment |  | Principal |  | Allowance
Impaired loans with a valuation allowance | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial and industrial | ​ | $ | 675 | ​ | $ | 711 | ​ | $ | 275 | ​ | $ | 445 | ​ | $ | 464 | ​ | $ | 278
Real estate construction | ​ | ​ | 262 | ​ | ​ | 440 | ​ | ​ | 97 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Commercial real estate | ​ |  | 896 | ​ |  | 900 | ​ |  | 582 | ​ |  | 180 | ​ |  | 203 | ​ |  | 5
Residential real estate junior lien | ​ |  | — | ​ |  | — | ​ | ​ | — | ​ | ​ | — | ​ |  | — | ​ | ​ | —
Other revolving and installment | ​ |  | — | ​ |  | — | ​ |  | — | ​ | ​ | — | ​ |  | — | ​ |  | —
Total impaired loans with a valuation allowance | ​ | ​ | 1,833 | ​ | ​ | 2,051 | ​ | ​ | 954 | ​ | ​ | 625 | ​ | ​ | 667 | ​ | ​ | 283
Impaired loans without a valuation allowance |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ |  |  | ​ |  |  | ​ |
Commercial and industrial | ​ | ​ | 638 | ​ | ​ | 767 | ​ | ​ | — | ​ | ​ | 1,386 | ​ | ​ | 1,575 | ​ | ​ | —
Real estate construction | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Commercial real estate | ​ |  | 576 | ​ | ​ | 660 | ​ |  | — | ​ | ​ | 629 | ​ |  | 684 | ​ |  | —
Residential real estate first mortgage | ​ |  | 535 | ​ |  | 573 | ​ |  | — | ​ | ​ | 21 | ​ |  | 24 | ​ |  | —
Residential real estate junior lien | ​ |  | 184 | ​ |  | 218 | ​ |  | — | ​ | ​ | 91 | ​ |  | 120 | ​ |  | —
Other revolving and installment | ​ |  | 1 | ​ |  | 1 | ​ |  | — | ​ | ​ | — | ​ |  | — | ​ |  | —
Total impaired loans without a valuation allowance | ​ | ​ | 1,934 | ​ | ​ | 2,219 | ​ | ​ | — | ​ | ​ | 2,127 | ​ | ​ | 2,403 | ​ | ​ | —
Total impaired loans | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  | ​ |  |  | ​ |  |
Commercial and industrial | ​ | ​ | 1,313 | ​ | ​ | 1,478 | ​ | ​ | 275 | ​ | ​ | 1,831 | ​ | ​ | 2,039 | ​ | ​ | 278
Real estate construction | ​ | ​ | 262 | ​ | ​ | 440 | ​ | ​ | 97 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Commercial real estate | ​ |  | 1,472 | ​ |  | 1,560 | ​ |  | 582 | ​ |  | 809 | ​ |  | 887 | ​ |  | 5
Residential real estate first mortgage | ​ | ​ | 535 | ​ | ​ | 573 | ​ | ​ | — | ​ | ​ | 21 | ​ | ​ | 24 | ​ | ​ | —
Residential real estate junior lien | ​ |  | 184 | ​ |  | 218 | ​ |  | — | ​ |  | 91 | ​ |  | 120 | ​ |  | —
Other revolving and installment | ​ |  | 1 | ​ |  | 1 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Total impaired loans | ​ | $ | 3,767 | ​ | $ | 4,270 | ​ | $ | 954 | ​ | $ | 2,752 | ​ | $ | 3,070 | ​ | $ | 283
​ The table below presents the average recorded investment in impaired loans and interest income for the three years ending December 31, 2022, 2021, and 2020:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ | ​ | 2022 | ​ | 2021 | ​ | 2020
​ | ​ | Average | ​ | ​ | ​ | ​ | Average | ​ | ​ | ​ | ​ | Average | ​ | ​ | ​
​ | ​ | Recorded | ​ | Interest | ​ | Recorded | ​ | Interest | ​ | Recorded | ​ | Interest
(dollars in thousands) |  | Investment |  | Income |  | Investment |  | Income |  | Investment |  | Income
Impaired loans with a valuation allowance | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​
Commercial and industrial | ​ | $ | 722 | ​ | $ | 13 | ​ | $ | 517 | ​ | $ | 13 | ​ | $ | 765 | ​ | $ | 14
Real estate construction | ​ | ​ | 442 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Commercial real estate | ​ |  | 935 | ​ |  | — | ​ |  | 187 | ​ |  | 7 | ​ | ​ | 3,972 | ​ |  | 138
Residential real estate junior lien | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | ​ | 19 | ​ |  | —
Other revolving and installment | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | ​ | 28 | ​ |  | —
Total impaired loans with a valuation allowance | ​ | ​ | 2,099 | ​ | ​ | 13 | ​ | ​ | 704 | ​ | ​ | 20 | ​ | ​ | 4,784 | ​ | ​ | 152
Impaired loans without a valuation allowance | ​ | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Commercial and industrial | ​ | ​ | 707 | ​ | ​ | — | ​ | ​ | 1,988 | ​ | ​ | 20 | ​ | ​ | 4,151 | ​ | ​ | 25
Real estate construction | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Commercial real estate | ​ |  | 618 | ​ |  | — | ​ |  | 672 | ​ |  | — | ​ | ​ | 1,614 | ​ |  | —
Residential real estate first mortgage | ​ |  | 575 | ​ |  | — | ​ |  | 23 | ​ |  | — | ​ | ​ | 461 | ​ |  | —
Residential real estate junior lien | ​ |  | 191 | ​ |  | — | ​ |  | 98 | ​ | ​ | — | ​ | ​ | 234 | ​ | ​ | 3
Other revolving and installment | ​ |  | 1 | ​ |  | — | ​ |  | 1 | ​ |  | — | ​ | ​ | — | ​ |  | —
Total impaired loans without a valuation allowance | ​ | ​ | 2,092 | ​ | ​ | — | ​ | ​ | 2,782 | ​ | ​ | 20 | ​ | ​ | 6,460 | ​ | ​ | 28
Total impaired loans | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  | ​ |  |
Commercial and industrial | ​ | ​ | 1,429 | ​ | ​ | 13 | ​ | ​ | 2,505 | ​ | ​ | 33 | ​ | ​ | 4,916 | ​ | ​ | 39
Real estate construction | ​ | ​ | 442 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Commercial real estate | ​ |  | 1,553 | ​ |  | — | ​ |  | 859 | ​ |  | 7 | ​ | ​ | 5,586 | ​ |  | 138
Residential real estate first mortgage | ​ |  | 575 | ​ |  | — | ​ |  | 23 | ​ |  | — | ​ | ​ | 461 | ​ |  | —
Residential real estate junior lien | ​ |  | 191 | ​ |  | — | ​ |  | 98 | ​ |  | — | ​ | ​ | 253 | ​ |  | 3
Other revolving and installment | ​ |  | 1 | ​ |  | — | ​ |  | 1 | ​ |  | — | ​ | ​ | 28 | ​ |  | —
Total impaired loans | ​ | $ | 4,191 | ​ | $ | 13 | ​ | $ | 3,486 | ​ | $ | 40 | ​ | $ | 11,244 | ​ | $ | 180
​ Loans with a carrying value of $1.5 billion and $1.2 billion were pledged at December 31, 2022 and 2021, respectively, to secure FHLB borrowings, public deposits, and for other purposes required or permitted by law. Under certain circumstances, the Company will provide borrowers relief through loan restructurings. A restructuring of debt constitutes a troubled debt restructuring, or TDR, if the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. TDR concessions can include reduction of interest rates, extension of maturity dates, forgiveness of principal or interest due, or acceptance of other assets in full or partial satisfaction of the debt. During the year December 31, 2022, there were no loans modified as a TDR. During the second quarter of 2021, there were three loans modified as TDRs as a result of changing the terms allowing for interest rate reductions and an extension of the maturity dates. As of December 31, 2021, the carrying value of the restructured loans was $701 thousand. The loans are not currently performing in compliance with the modified terms and were placed on nonaccrual. There was no specific reserve for loan losses allocated to the loan modified as a TDR. Consistent with regulatory guidance urging banks to work with borrowers during the COVID-19 pandemic, the Company offered a payment deferral program for its lending clients that were adversely affected by the COVID-19 pandemic. These deferrals were generally no more than 90 days in duration and were not considered TDRs in accordance with the Interagency Statement on Loan Modifications and Reporting for Financial Institutions as issued on April 7, 2020. For the year ended December 31, 2022, the Company entered into no new modifications and as of December 31, 2022, only one loan with a total outstanding principal balance of $268 thousand remained on deferral. As of December 31, 2021, 6 loans with a total outstanding principal balance of $3.3 million had been granted second deferrals, 2 loans with a total outstanding principal balance of $72 thousand remained on the first deferral and the remaining loans have been returned to a normal payment status. As an SBA-Certified Preferred lender, we were delegated the authority as part of the CARES Act to make PPP SBA-guaranteed financing available to eligible borrowers. As of December 31, 2021, we had assisted 2,454 new and existing clients secure approximately $474.2 million of PPP financing. The SBA pays a processing fee based on the balance of the financing outstanding at the time of final disbursement. The processing fees were as follows: five percent for loans of not more than $350 thousand, three percent for loans of more than $350 thousand and less than $2 million, and one percent for loans of at least $2 million. Net processing fees in the amount of $15.7 million were being deferred and recognized as interest income on a level yield method of the life of the represented loans. At December 31, 2022, the Company recognized all of the net processing fees. The Company does not have material commitments to lend additional funds to borrowers with loans whose terms have been modified in TDRs or whose loans are on nonaccrual.

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