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Loans and Allowance for Credit Losses | 3 Months Ended
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Mar. 31, 2024
Receivables [Abstract] |
Loans and Allowance for Credit Losses | Loans and Allowance for Credit Losses On January 1, 2023, the Company adopted ASC 326. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables. For further discussion on the most significant accounting policies that the Company follows see Note 1 – Summary of Significant Accounting Policies of the Company’s 2023 Annual Report. The Company makes residential mortgage, commercial, and consumer loans to customers primarily in Anne Arundel County, Baltimore County, Charles County, Calvert County, St Mary’s County, Howard County, Kent County, Queen Anne’s County, Caroline County, Talbot County, Dorchester County and Worcester County in Maryland, Kent and Sussex County, Delaware and in Accomack County, Stafford County, Spotsylvania County and Fredericksburg City in Virginia. The following table provides information about the principal classes of the loan portfolio at March 31, 2024 and December 31, 2023.
(Dollars in thousands) |  | March 31, 2024 |  | % of Total Loans |  | December 31, 2023 |  | % of Total Loans
Construction |  | $ | 299,133 |  |  | 6.43 | % |  | $ | 299,000 |  |  | 6.44 | %
Residential real estate |  | 1,515,134 |  |  | 32.59 | % |  | 1,490,438 |  |  | 32.11 | %
Commercial real estate |  | 2,272,867 |  |  | 48.90 | % |  | 2,286,154 |  |  | 49.27 | %
Commercial |  | 229,594 |  |  | 4.94 | % |  | 229,939 |  |  | 4.95 | %
Consumer |  | 325,076 |  |  | 6.99 | % |  | 328,896 |  |  | 7.09 | %
Credit Cards |  | 6,921 |  |  | 0.15 | % |  | 6,583 |  |  | 0.14 | %
Total loans |  | 4,648,725 |  |  | 100.00 | % |  | 4,641,010 |  |  | 100.00 | %
Allowance for credit losses on loans |  | (57,336) |  |  |  |  | (57,351) |  |  |
Total loans, net |  | $ | 4,591,389 |  |  |  |  | $ | 4,583,659 |  |  |
Loans are stated at their principal amount outstanding net of any purchase premiums/discounts, deferred fees and costs. Included in loans were deferred costs, net of fees, of $2.4 million and $2.2 million at March 31, 2024 and December 31, 2023. At March 31, 2024 and December 31, 2023 included in total loans were $1.6 billion and $1.6 billion in loans acquired as part of the acquisition of TCFC, effective July 1, 2023. These balances were presented net of the related discount which totaled $104.2 million and $108.4 million at March 31, 2024 and December 31, 2023, respectively. At March 31, 2024 and December 31, 2023, included in total loans were $289.0 million and $297.9 million in loans, acquired as part of the acquisition of Severn Bancorp, Inc. (“Severn”), effective October 31, 2021. These balances were presented net of the related discount which totaled $4.4 million and $4.7 million at March 31, 2024 and December 31, 2023, respectively. At March 31, 2024, the Bank was servicing $371.1 million in loans for the Federal National Mortgage Association and $117.8 million in loans for Freddie Mac. The following table provides information on nonaccrual loans by loan class as of March 31, 2024 and December 31, 2023.
(Dollars in thousands) |  | Non-accrual with no allowance for credit loss |  | Non-accrual with an allowance for credit loss |  | Total Non-accruals
March 31, 2024 |  |  |  |  |  |
Nonaccrual loans: |  |  |  |  |  |
Construction |  | $ | — |  |  | $ | 476 |  |  | $ | 476 |
Residential real estate |  | 4 |  |  | 6,379 |  |  | 6,383 |
Commercial real estate |  | — |  |  | 3,643 |  |  | 3,643 |
Commercial |  | 1,209 |  |  | 147 |  |  | 1,356 |
Consumer |  | 694 |  |  | 224 |  |  | 918 |
Total |  | $ | 1,907 |  |  | $ | 10,869 |  |  | $ | 12,776 |
Interest income |  | $ | 187 |  |  | $ | 33 |  |  | $ | 220 |
(Dollars in thousands) |  | Non-accrual with no allowance for credit loss |  | Non-accrual with an allowance for credit loss |  | Total Non-accruals
December 31, 2023 |  |  |  |  |  |
Nonaccrual loans: |  |  |  |  |  |
Construction |  | $ | 626 |  |  | $ | — |  |  | $ | 626 |
Residential real estate |  | 5,865 |  |  | 480 |  |  | 6,345 |
Commercial real estate |  | 4,364 |  |  | — |  |  | 4,364 |
Commercial |  | 176 |  |  | 368 |  |  | 544 |
Consumer |  | 216 |  |  | 689 |  |  | 905 |
Total |  | $ | 11,247 |  |  | $ | 1,537 |  |  | $ | 12,784 |
Interest income |  | $ | 399 |  |  | $ | 53 |  |  | $ | 452 |
(Dollars in thousands) |  | Non-accrual Delinquent Loans |  | Non-accrual Current Loans |  | Total Non-accruals
March 31, 2024 |  |  |  |  |  |
Nonaccrual loans: |  |  |  |  |  |
Construction |  | $ | 210 |  |  | $ | 266 |  |  | $ | 476 |
Residential real estate |  | 3,718 |  |  | 2,665 |  |  | 6,383 |
Commercial real estate |  | 940 |  |  | 2,703 |  |  | 3,643 |
Commercial |  | 51 |  |  | 1,305 |  |  | 1,356 |
Consumer |  | 918 |  |  | — |  |  | 918 |
Total |  | $ | 5,837 |  |  | $ | 6,939 |  |  | $ | 12,776 |
(Dollars in thousands) |  | Non-accrual Delinquent Loans |  | Non-accrual Current Loans |  | Total Non-accruals
December 31, 2023 |  |  |  |  |  |
Nonaccrual loans: |  |  |  |  |  |
Construction |  | $ | 221 |  |  | $ | 405 |  |  | $ | 626 |
Residential real estate |  | 4,137 |  |  | 2,208 |  |  | 6,345 |
Commercial real estate |  | 1,215 |  |  | 3,149 |  |  | 4,364 |
Commercial |  | 28 |  |  | 516 |  |  | 544 |
Consumer |  | 903 |  |  | 2 |  |  | 905 |
Total |  | $ | 6,504 |  |  | $ | 6,280 |  |  | $ | 12,784 |
The overall quality of the Bank’s loan portfolio is primarily assessed using the Bank’s risk-grading scale. This review process is assisted by frequent internal reporting of loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming and potential problem loans. Credit quality indicators are adjusted based on management’s judgment during the quarterly review process. Consumer credit cards are monitored based on a borrower payment history. Credit card loans are classified as performing and are typically charged off no later than 180 days past due when, in the opinion of management, the collection of principal or interest is considered doubtful. Loans subject to risk ratings are graded on a scale of one to ten. Ratings 1 thru 6 – Pass - Ratings 1 thru 6 have asset risks ranging from excellent-low to adequate. The specific rating assigned considers customer history of earnings, cash flows, liquidity, leverage, capitalization, consistency of debt service coverage, the nature and extent of customer relationship and other relevant specific business factors such as the stability of the industry or market area, changes to management, litigation or unexpected events that could have an impact on risks. Rating 7 – Special Mention - These credits have potential weaknesses due to economic conditions, less than adequate earnings performance or other factors which require the lending officer to direct more than normal attention to the credit. Financing alternatives may be limited and/or command higher risk interest rates. Special mention loan relationships are reviewed at least quarterly. Rating 8 – Substandard - Substandard assets are assets that are inadequately protected by the sound worth or paying capacity of the borrower or of the collateral pledged. Substandard loans are the first adversely classified loans on the Bank's watchlist. These assets have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the possibility that the Bank will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified substandard. The loans may have a delinquent history or combination of weak collateral, weak guarantor or operating losses. When a loan is assigned to this category the Bank may estimate a specific reserve in the loan loss allowance analysis and/or place the loan on nonaccrual. These assets listed may include assets with histories of repossessions or some that are non-performing bankruptcies. These relationships will be reviewed at least quarterly. Rating 9 – Doubtful - Doubtful assets have many of the same characteristics of substandard with the exception that the Bank has determined that loss is not only possible but is probable. The amount of loss is not discernible due to factors such as merger, acquisition, or liquidation; a capital injection; a pledge of additional collateral; the sale of assets; or alternative refinancing plans. Credits receiving a doubtful classification are required to be on nonaccrual. These relationships will be reviewed at least quarterly. Rating 10 – Loss – Loss assets are uncollectible or of little value. The following tables provides information on loan risk ratings as of March 31, 2024 and gross write-offs during the three months ended March 31, 2024.
|  | Term Loans by Origination Year |  | Revolving Loans |  | Revolving Converted to Term Loans |  | Total
(Dollars in thousands) |  | Prior |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  |  |
March 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction
Pass |  | $ | 38,125 |  |  | $ | 14,343 |  |  | $ | 25,261 |  |  | $ | 87,793 |  |  | $ | 112,241 |  |  | $ | 12,386 |  |  | $ | 7,890 |  |  | $ | 617 |  |  | $ | 298,656 |
Substandard |  | 62 |  |  | — |  |  | — |  |  | 415 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 477 |
Total |  | $ | 38,187 |  |  | $ | 14,343 |  |  | $ | 25,261 |  |  | $ | 88,208 |  |  | $ | 112,241 |  |  | $ | 12,386 |  |  | $ | 7,890 |  |  | $ | 617 |  |  | $ | 299,133 |
Gross Charge-offs |  | $ | — |  |  | $ | — |  |  | $ | (12) |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (12) |
Residential real estate
Pass |  | $ | 370,852 |  |  | $ | 102,832 |  |  | $ | 250,832 |  |  | $ | 400,047 |  |  | $ | 238,040 |  |  | $ | 23,294 |  |  | $ | 107,384 |  |  | $ | 12,880 |  |  | $ | 1,506,161 |
Special Mention |  | 403 |  |  | 552 |  |  | 498 |  |  | — |  |  | — |  |  | — |  |  | 182 |  |  | — |  |  | 1,635 |
Substandard |  | 5,922 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,416 |  |  | — |  |  | 7,338 |
Total |  | $ | 377,177 |  |  | $ | 103,384 |  |  | $ | 251,330 |  |  | $ | 400,047 |  |  | $ | 238,040 |  |  | $ | 23,294 |  |  | $ | 108,982 |  |  | $ | 12,880 |  |  | $ | 1,515,134 |
Gross Charge-offs |  | $ | (1) |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (1) |
Commercial real estate
Pass |  | $ | 843,547 |  |  | $ | 306,361 |  |  | $ | 418,343 |  |  | $ | 428,863 |  |  | $ | 211,540 |  |  | $ | 23,024 |  |  | $ | 15,782 |  |  | $ | — |  |  | $ | 2,247,460 |
Special Mention |  | 11,383 |  |  | — |  |  | 5,474 |  |  | 4,418 |  |  | — |  |  | — |  |  | 166 |  |  | — |  |  | 21,441 |
Substandard |  | 3,437 |  |  | — |  |  | 529 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,966 |
Total |  | $ | 858,367 |  |  | $ | 306,361 |  |  | $ | 424,346 |  |  | $ | 433,281 |  |  | $ | 211,540 |  |  | $ | 23,024 |  |  | $ | 15,948 |  |  | $ | — |  |  | $ | 2,272,867 |
Gross Charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial
Pass |  | $ | 33,571 |  |  | $ | 14,629 |  |  | $ | 55,492 |  |  | $ | 35,027 |  |  | $ | 29,904 |  |  | $ | 10,915 |  |  | $ | 46,160 |  |  | $ | 394 |  |  | $ | 226,092 |
Special Mention |  | 135 |  |  | — |  |  | — |  |  | 1,514 |  |  | 580 |  |  | — |  |  | 500 |  |  | 70 |  |  | 2,799 |
Substandard |  | 402 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 301 |  |  | — |  |  | 703 |
Total |  | $ | 34,108 |  |  | $ | 14,629 |  |  | $ | 55,492 |  |  | $ | 36,541 |  |  | $ | 30,484 |  |  | $ | 10,915 |  |  | $ | 46,961 |  |  | $ | 464 |  |  | $ | 229,594 |
Gross Charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Consumer
Pass |  | $ | 1,355 |  |  | $ | 12,829 |  |  | $ | 71,502 |  |  | $ | 136,759 |  |  | $ | 82,331 |  |  | $ | 17,387 |  |  | $ | 677 |  |  | $ | — |  |  | $ | 322,840 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,317 |  |  | — |  |  | — |  |  | — |  |  | 1,317 |
Substandard |  | 8 |  |  | 7 |  |  | 12 |  |  | 783 |  |  | 108 |  |  | — |  |  | 1 |  |  | — |  |  | 919 |
Total |  | $ | 1,363 |  |  | $ | 12,836 |  |  | $ | 71,514 |  |  | $ | 137,542 |  |  | $ | 83,756 |  |  | $ | 17,387 |  |  | $ | 678 |  |  | $ | — |  |  | $ | 325,076 |
Gross Charge-offs |  | $ | (226) |  |  | $ | — |  |  | $ | (46) |  |  | $ | (238) |  |  | $ | — |  |  | $ | (15) |  |  | $ | — |  |  |  |  | $ | (525) |
Total
Pass |  | $ | 1,287,450 |  |  | $ | 450,994 |  |  | $ | 821,430 |  |  | $ | 1,088,489 |  |  | $ | 674,056 |  |  | $ | 87,006 |  |  | $ | 177,893 |  |  | $ | 13,891 |  |  | $ | 4,601,209 |
Special Mention |  | 11,921 |  |  | 552 |  |  | 5,972 |  |  | 5,932 |  |  | 1,897 |  |  | — |  |  | 848 |  |  | 70 |  |  | 27,192 |
Substandard |  | 9,831 |  |  | 7 |  |  | 541 |  |  | 1,198 |  |  | 108 |  |  | — |  |  | 1,718 |  |  | — |  |  | 13,403 |
Total loans by risk category |  | $ | 1,309,202 |  |  | $ | 451,553 |  |  | $ | 827,943 |  |  | $ | 1,095,619 |  |  | $ | 676,061 |  |  | $ | 87,006 |  |  | $ | 180,459 |  |  | $ | 13,961 |  |  | $ | 4,641,804 |
Total gross charge-offs |  | $ | (227) |  |  | $ | — |  |  | $ | (58) |  |  | $ | (238) |  |  | $ | — |  |  | $ | (15) |  |  | $ | — |  |  | $ | — |  |  | $ | (538) |
|  | Term Loans by Origination Year |  | Revolving Loans |  | Revolving Converted to Term Loans |  | Total
(Dollars in thousands) |  | Prior |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  |  |
March 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Credit Cards
Performing |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 6,921 |  |  | $ | — |  |  | $ | 6,921 |
Total |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 6,921 |  |  | $ | — |  |  | $ | 6,921 |
Gross Charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (116) |  |  | $ | — |  |  | $ | (116) |
Total loans evaluated by performing status |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 6,921 |  |  | $ | — |  |  | $ | 6,921 |
Total gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (116) |  |  | $ | — |  |  | $ | (116) |
Total Recorded Investment |  | $ | 1,309,202 |  |  | $ | 451,553 |  |  | $ | 827,943 |  |  | $ | 1,095,619 |  |  | $ | 676,061 |  |  | $ | 87,006 |  |  | $ | 187,380 |  |  | $ | 13,961 |  |  | $ | 4,648,725 |
The following tables provides information on loan risk ratings as of December 31, 2023 and gross write-offs during twelve months ended December 31, 2023.
|  | Term Loans by Origination Year |  | Revolving loans |  | Revolving converted to term loans |  | Total
(Dollars in thousands) |  | Prior |  | 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  |  |
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 23,450 |  |  | $ | 15,721 |  |  | $ | 14,773 |  |  | $ | 34,325 |  |  | $ | 101,426 |  |  | $ | 100,620 |  |  | $ | 8,056 |  |  | $ | — |  |  | $ | 298,371 |
Substandard |  | 199 |  |  | — |  |  | — |  |  | 12 |  |  | 418 |  |  | — |  |  | — |  |  | — |  |  | 629 |
Total |  | $ | 23,649 |  |  | $ | 15,721 |  |  | $ | 14,773 |  |  | $ | 34,337 |  |  | $ | 101,844 |  |  | $ | 100,620 |  |  | $ | 8,056 |  |  | $ | — |  |  | $ | 299,000 |
Gross Charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 317,528 |  |  | $ | 54,387 |  |  | $ | 105,269 |  |  | $ | 251,269 |  |  | $ | 392,378 |  |  | $ | 239,914 |  |  | $ | 119,777 |  |  | $ | 874 |  |  | $ | 1,481,396 |
Special Mention |  | 154 |  |  | 256 |  |  | 564 |  |  | 503 |  |  | — |  |  | — |  |  | 192 |  |  | — |  |  | 1,669 |
Substandard |  | 6,000 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,373 |  |  | — |  |  | 7,373 |
Total |  | $ | 323,682 |  |  | $ | 54,643 |  |  | $ | 105,833 |  |  | $ | 251,772 |  |  | $ | 392,378 |  |  | $ | 239,914 |  |  | $ | 121,342 |  |  | $ | 874 |  |  | $ | 1,490,438 |
Gross Charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (119) |  |  | $ | — |  |  | $ | (119) |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 670,042 |  |  | $ | 190,753 |  |  | $ | 311,980 |  |  | $ | 426,750 |  |  | $ | 428,240 |  |  | $ | 210,915 |  |  | $ | 14,873 |  |  | $ | 2,138 |  |  | $ | 2,255,691 |
Special Mention |  | 14,986 |  |  | 331 |  |  | — |  |  | 5,501 |  |  | 4,446 |  |  | — |  |  | 100 |  |  | 409 |  |  | 25,773 |
Substandard |  | 2,119 |  |  | 2,029 |  |  | — |  |  | 542 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,690 |
Total |  | $ | 687,147 |  |  | $ | 193,113 |  |  | $ | 311,980 |  |  | $ | 432,793 |  |  | $ | 432,686 |  |  | $ | 210,915 |  |  | $ | 14,973 |  |  | $ | 2,547 |  |  | $ | 2,286,154 |
Gross Charge-offs |  | $ | (512) |  |  | $ | — |  |  | $ | (814) |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (1,326) |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 23,771 |  |  | $ | 12,946 |  |  | $ | 14,464 |  |  | $ | 41,621 |  |  | $ | 35,897 |  |  | $ | 27,901 |  |  | $ | 49,160 |  |  | $ | 22,284 |  |  | $ | 228,044 |
Special Mention |  | 143 |  |  | — |  |  | — |  |  | 425 |  |  | — |  |  | — |  |  | 251 |  |  | — |  |  | 819 |
Substandard |  | 160 |  |  | 69 |  |  | — |  |  | — |  |  | 487 |  |  | — |  |  | 314 |  |  | 46 |  |  | 1,076 |
Total |  | $ | 24,074 |  |  | $ | 13,015 |  |  | $ | 14,464 |  |  | $ | 42,046 |  |  | $ | 36,384 |  |  | $ | 27,901 |  |  | $ | 49,725 |  |  | $ | 22,330 |  |  | $ | 229,939 |
Gross Charge-offs |  | $ | (1) |  |  | $ | — |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (242) |  |  | $ | (243) |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 621 |  |  | $ | 961 |  |  | $ | 14,158 |  |  | $ | 76,629 |  |  | $ | 143,507 |  |  | $ | 91,415 |  |  | $ | 699 |  |  | $ | — |  |  | $ | 327,990 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2 |  |  | — |  |  | 2 |
Substandard |  | — |  |  | 38 |  |  | 5 |  |  | 80 |  |  | 780 |  |  | — |  |  | 1 |  |  | — |  |  | 904 |
Total |  | $ | 621 |  |  | $ | 999 |  |  | $ | 14,163 |  |  | $ | 76,709 |  |  | $ | 144,287 |  |  | $ | 91,415 |  |  | $ | 702 |  |  | $ | — |  |  | $ | 328,896 |
Gross Charge-offs |  | $ | (522) |  |  | $ | — |  |  | $ | (16) |  |  | $ | (17) |  |  | $ | (8) |  |  | $ | (4) |  |  | $ | (7) |  |  | $ | — |  |  | $ | (574) |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,035,412 |  |  | $ | 274,768 |  |  | $ | 460,644 |  |  | $ | 830,594 |  |  | $ | 1,101,448 |  |  | $ | 670,765 |  |  | $ | 192,565 |  |  | $ | 25,296 |  |  | $ | 4,591,492 |
Special Mention |  | 15,283 |  |  | $ | 587 |  |  | $ | 564 |  |  | $ | 6,429 |  |  | $ | 4,446 |  |  | $ | — |  |  | $ | 545 |  |  | $ | 409 |  |  | 28,263 |
Substandard |  | 8,478 |  |  | 2,136 |  |  | 5 |  |  | 634 |  |  | 1,685 |  |  | — |  |  | 1,688 |  |  | 46 |  |  | 14,672 |
Total loans by risk category |  | $ | 1,059,173 |  |  | $ | 277,491 |  |  | $ | 461,213 |  |  | $ | 837,657 |  |  | $ | 1,107,579 |  |  | $ | 670,765 |  |  | $ | 194,798 |  |  | $ | 25,751 |  |  | $ | 4,634,427 |
Total gross charge-offs |  | $ | (1,035) |  |  | $ | — |  |  | $ | (830) |  |  | $ | (17) |  |  | $ | (8) |  |  | $ | (4) |  |  | $ | (126) |  |  | $ | (242) |  |  | $ | (2,262) |
Credit Cards |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 6,583 |  |  | $ | — |  |  | $ | 6,583 |
Total |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 6,583 |  |  | $ | — |  |  | $ | 6,583 |
Gross Charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (111) |  |  | $ | — |  |  | $ | (111) |
Total loans evaluated by performing status |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 6,583 |  |  | $ | — |  |  | $ | 6,583 |
Total gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (111) |  |  | $ | — |  |  | $ | (111) |
Total Recorded Investment |  | $ | 1,059,173 |  |  | $ | 277,491 |  |  | $ | 461,213 |  |  | $ | 837,657 |  |  | $ | 1,107,579 |  |  | $ | 670,765 |  |  | $ | 201,381 |  |  | $ | 25,751 |  |  | $ | 4,641,010 |
The following tables provide information on the aging of the loan portfolio as of March 31, 2024 and December 31, 2023.
|  | Accruing |  |  |  |  |  |  |  |  |  |  |  |  |  |
(Dollars in thousands) |  | 30‑59 days past due |  | 60‑89 days past due |  | 30-89 days past due and not accruing |  | 90 days past due and still accruing |  | 90 days past due and not accruing |  | Total past due |  | Current Accrual Loans (1) |  | Current Non Accrual Loans |  | Total
March 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 210 |  |  | $ | 210 |  |  | $ | 298,657 |  |  | $ | 266 |  |  | $ | 299,133 |
Residential real estate |  | 2,930 |  |  | 354 |  |  | 723 |  |  | 145 |  |  | 2,995 |  |  | 7,147 |  |  | 1,505,322 |  |  | 2,665 |  |  | 1,515,134 |
Commercial real estate |  | 433 |  |  | — |  |  | — |  |  | — |  |  | 940 |  |  | 1,373 |  |  | 2,268,791 |  |  | 2,703 |  |  | 2,272,867 |
Commercial |  | 2,137 |  |  | — |  |  | — |  |  | — |  |  | 51 |  |  | 2,188 |  |  | 226,101 |  |  | 1,305 |  |  | 229,594 |
Consumer |  | 2,200 |  |  | 138 |  |  | 24 |  |  | 1,317 |  |  | 894 |  |  | 4,573 |  |  | 320,503 |  |  | — |  |  | 325,076 |
Credit Cards |  | 58 |  |  | 89 |  |  | — |  |  | 98 |  |  | — |  |  | 245 |  |  | 6,676 |  |  | — |  |  | 6,921 |
Total |  | $ | 7,758 |  |  | $ | 581 |  |  | $ | 747 |  |  | $ | 1,560 |  |  | $ | 5,090 |  |  | $ | 15,736 |  |  | $ | 4,626,050 |  |  | $ | 6,939 |  |  | $ | 4,648,725 |
Percent of total loans |  | 0.17 | % |  | 0.01 | % |  | 0.02 | % |  | 0.03 | % |  | 0.11 | % |  | 0.34 | % |  | 99.51 | % |  | 0.15 | % |  | 100.0 | %
(1)Includes loans measured at fair value of $9.7 million at March 31, 2024.
|  | Accruing |  |  |  |  |  |  |  |  |  |  |  |  |  |
(Dollars in thousands) |  | 30‑59 days past due |  | 60‑89 days past due |  | 30-89 days past due and not accruing |  | 90 days past due and still accruing |  | 90 days past due and not accruing |  | Total past due |  | Current Accrual Loans (1) |  | Current Non accrual Loans |  | Total
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction |  | $ | 1,919 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 220 |  |  | $ | 2,139 |  |  | $ | 296,456 |  |  | $ | 405 |  |  | $ | 299,000 |
Residential real estate |  | 2,420 |  |  | 271 |  |  | 1,469 |  |  | 108 |  |  | 2,668 |  |  | 6,936 |  |  | 1,481,294 |  |  | 2,208 |  |  | 1,490,438 |
Commercial real estate |  | 16 |  |  | — |  |  | — |  |  | — |  |  | 1,222 |  |  | 1,238 |  |  | 2,281,767 |  |  | 3,149 |  |  | 2,286,154 |
Commercial |  | 48 |  |  | — |  |  | — |  |  | 488 |  |  | 28 |  |  | 564 |  |  | 228,859 |  |  | 516 |  |  | 229,939 |
Consumer |  | 3,224 |  |  | 1,391 |  |  | 24 |  |  | — |  |  | 879 |  |  | 5,518 |  |  | 323,376 |  |  | 2 |  |  | 328,896 |
Credit cards |  | $ | 35 |  |  | $ | 36 |  |  | $ | — |  |  | $ | 142 |  |  | $ | — |  |  | $ | 213 |  |  | $ | 6,370 |  |  | $ | — |  |  | $ | 6,583 |
Total |  | $ | 7,662 |  |  | $ | 1,698 |  |  | $ | 1,493 |  |  | $ | 738 |  |  | $ | 5,017 |  |  | $ | 16,608 |  |  | $ | 4,618,122 |  |  | $ | 6,280 |  |  | $ | 4,641,010 |
Percent of total loans |  | 0.17 | % |  | 0.04 | % |  | 0.03 | % |  | 0.02 | % |  | 0.11 | % |  | 0.37 | % |  | 99.50 | % |  | 0.13 | % |  | 100.00 | %
(1)Includes loans measured at fair value of $9.9 million at December 31, 2023. The following tables provide a summary of the activity in the ACL allocated by loan class for the three months ended March 31, 2024 and March 31, 2023. Allocation of a portion of the allowance to one loan class does not preclude its availability to absorb losses in other loan classes.
(Dollars in thousands) |  | Beginning Balance |  |  |  | Charge-offs |  | Recoveries |  | Net (charge-offs) recoveries |  | Provisions |  | Ending Balance
For three months ended March 31, 2024
Construction |  | $ | 3,935 |  |  |  |  | $ | (12) |  |  | $ | 2 |  |  | $ | (10) |  |  | $ | (367) |  |  | $ | 3,558 |
Residential real estate |  | 21,949 |  |  |  |  | (1) |  |  | 2 |  |  | 1 |  |  | (1,182) |  |  | 20,768 |
Commercial real estate |  | 20,975 |  |  |  |  | — |  |  | — |  |  | — |  |  | 275 |  |  | 21,250 |
Commercial |  | 2,671 |  |  |  |  | — |  |  | 1 |  |  | 1 |  |  | 207 |  |  | 2,879 |
Consumer (1) |  | 7,601 |  |  |  |  | (525) |  |  | 76 |  |  | (449) |  |  | 1,530 |  |  | 8,682 |
Credit Card |  | 220 |  |  |  |  | (116) |  |  | 8 |  |  | (108) |  |  | 87 |  |  | 199 |
Total |  | $ | 57,351 |  |  |  |  | $ | (654) |  |  | $ | 89 |  |  | $ | (565) |  |  | $ | 550 |  |  | $ | 57,336 |
(1)Gross charge-offs of consumer loans for the three months ended March 31, 2024 included $0.2 million of demand deposit overdrafts.
(Dollars in thousands) |  | Beginning Balance |  | Impact of ASC326 Adoption |  |  |  | Charge-offs |  | Recoveries |  | Net (charge-offs) recoveries |  | Provisions |  | Ending Balance
For Three Months Ended March 31, 2023
Construction |  | $ | 2,973 |  |  | $ | 1,222 |  |  |  |  | $ | — |  |  | $ | 3 |  |  | $ | 3 |  |  | $ | (1,509) |  |  | $ | 2,689 |
Residential real estate |  | 2,622 |  |  | 4,974 |  |  |  |  | — |  |  | 31 |  |  | 31 |  |  | 1,120 |  |  | 8,747 |
Commercial real estate |  | 4,899 |  |  | 3,742 |  |  |  |  | — |  |  | — |  |  | — |  |  | 1,217 |  |  | 9,858 |
Commercial |  | 1,652 |  |  | 401 |  |  |  |  | (107) |  |  | 53 |  |  | (54) |  |  | (139) |  |  | 1,860 |
Consumer |  | 4,497 |  |  | 452 |  |  |  |  | — |  |  | — |  |  | — |  |  | 361 |  |  | 5,310 |
Total |  | $ | 16,643 |  |  | $ | 10,791 |  |  |  |  | $ | (107) |  |  | $ | 87 |  |  | $ | (20) |  |  | $ | 1,050 |  |  | $ | 28,464 |
The following table presents the amortized cost basis of collateral-dependent loans by loan portfolio segment.
|  | March 31, 2024
(Dollars in thousands) |  | Real Estate Collateral |  | Other Collateral |  | Total
Construction |  | $ | 477 |  |  | $ | — |  |  | $ | 477 |
Residential real estate |  | 19,272 |  |  | — |  |  | 19,272 |
Commercial real estate |  | 5,197 |  |  | — |  |  | 5,197 |
Commercial |  | — |  |  | 733 |  |  | 733 |
Consumer |  | — |  |  | 918 |  |  | 918 |
Total |  | $ | 24,946 |  |  | $ | 1,651 |  |  | $ | 26,597 |
|  | December 31, 2023
(Dollars in thousands) |  | Real Estate Collateral |  | Other Collateral |  | Total
Construction |  | $ | 662 |  |  | $ | — |  |  | $ | 662 |
Residential real estate |  | 8,047 |  |  | — |  |  | 8,047 |
Commercial real estate |  | 6,134 |  |  | — |  |  | 6,134 |
Commercial |  | — |  |  | 1,106 |  |  | 1,106 |
Consumer |  | — |  |  | 904 |  |  | 904 |
Total |  | $ | 14,843 |  |  | $ | 2,010 |  |  | $ | 16,853 |
The Company did not identify any significant changes in the extent to which collateral secures its collateral dependent loans, whether in the form of general deterioration or from other factors during the period ended March 31, 2024. Loan Modifications to Borrowers Experiencing Financial Difficulty Modifications to borrowers experiencing financial difficulty may include interest rate reduction, principal or interest forgiveness, forbearance, term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. The following illustrates the most common loan modifications by loan classes offered by the Company that are required to be disclosed pursuant to the requirements of ASU 2022-02:
Loan Classes |  | Modification Types
Commercial Real Estate |  | Term extension greater than three months.
Commercial |  | Term extension greater than three months.
The following table presents the amortized cost basis of loan modifications made to borrowers experiencing financial difficulty during three months ended March 31, 2024, and there were no modifications to loans for borrowers experiencing financial difficulty during the three months ended March 31, 2023.
(dollars in thousands) |  | Term Extension |  | Interest Rate Reduction |  | Payment Delay and Term Extension |  | Term Extension and Interest Rate Reduction |  | Payment Delay |  | Total |  | % of Total Portfolio Segment
March 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | — | %
Residential real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — | %
Residential rentals |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — | %
Commercial real estate |  | 117 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 117 |  |  | 0.01 | %
Commercial |  | 232 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 232 |  |  | 0.10 | %
Consumer |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — | %
Credit Cards |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — | %
Total |  | $ | 349 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 349 |  |  | 0.01 | %
The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2024, and there were no modifications to loans for borrowers experiencing financial difficulty during the three months ended March 31, 2023.
(dollars in thousands) |  | Weighted-Average Months of Term Extension |  |  |  |
March 31, 2024 |  |  |  |  |  |
Commercial real estate |  | 12 months |  |  |  |
Commercial |  | 12 months |  |  |  |
During the three months ended March 31, 2024 and March 31, 2023, there were no defaults on loan modifications made to borrowers experiencing financial difficulty. The following table present the aging analysis of loan modifications made to borrowers experiencing financial difficulty as of March 31, 2024, and there were no loan modifications made to borrowers experiencing financial difficulty at March 31, 2023.
|  | Accruing |  |  |  |  |  |  |  |  |  |
(Dollars in thousands) |  | 30‑59 days past due |  | 60‑89 days past due |  | 90 days past due and still accruing |  | 90 days past due and not accruing |  | Total past due |  | Current Accrual |  | Current Non-Accrual |  | Total Recorded Investment
March 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Residential real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 117 |  |  | 117 |
Commercial |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 232 |  |  | 232 |
Consumer |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Credit Cards |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 349 |  | $ | 349
Foreclosure Proceedings There were $0.2 million of consumer mortgage loans collateralized by residential real estate property that were in the process of foreclosure as of March 31, 2024 and $0.2 million as of December 31, 2023, respectively. There were no residential real estate properties included in the balance of other real estate owned (“OREO”) at March 31, 2024 and December 31, 2023.

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