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LOANS AND ALLOWANCE FOR CREDIT LOSSES | 9 Months Ended
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Sep. 30, 2023
LOANS AND ALLOWANCE FOR CREDIT LOSSES |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES ​ We evaluate risk characteristics of loans based on regulatory call report code with segmentation based on the underlying collateral for certain loan types. The following is a summary of total loans based on regulatory call report code segmentation for certain loan types: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31,
(in thousands) |  | 2023 |  | 2022
Commercial construction | ​ | $ | 147,423 | ​ | $ | 117,577
Commercial real estate owner occupied | ​ |  | 282,717 | ​ |  | 244,814
Commercial real estate non-owner occupied | ​ |  | 1,168,877 | ​ |  | 1,146,674
Tax exempt | ​ |  | 44,247 | ​ |  | 42,879
Commercial and industrial | ​ |  | 306,279 | ​ |  | 297,112
Residential real estate | ​ |  | 947,339 | ​ |  | 954,968
Home equity | ​ |  | 88,064 | ​ |  | 90,865
Consumer other | ​ |  | 7,845 | ​ |  | 7,801
Total loans | ​ |  | 2,992,791 | ​ |  | 2,902,690
Allowance for credit losses | ​ |  | 28,011 | ​ |  | 25,860
Net loans | ​ | $ | 2,964,780 | ​ | $ | 2,876,830
​ Total unamortized net costs and premiums included in loan totals were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31,
(in thousands) |  | 2023 |  | 2022
Net unamortized loan origination costs | ​ | $ | 2,793 | ​ | $ | 3,184
Net unamortized fair value discount on acquired loans | ​ |  | (3,042) | ​ |  | (3,506)
Total | ​ | $ | (249) | ​ | $ | (322)
​ We exclude accrued interest receivable from the amortized cost basis of loans disclosed throughout this footnote. As of September 30, 2023 and December 31, 2022, accrued interest receivable for loans totaled $11.0 million and $10.7 million, respectively, and is included in the “other assets” line item on the consolidated balance sheets. ​ Characteristics of each loan portfolio segment are as follows: ​ Commercial construction - Loans in this segment primarily include raw land, land development and construction of commercial and multifamily residential properties. Collateral values are determined based upon appraisals and evaluations of the completed structure in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy guidelines that are more restrictive than on stabilized commercial real estate transactions. Construction loans are primarily paid by the cash flow generated from the completed structure, such as operating leases, rents, or other operating cash flows from the borrower. ​ Commercial real estate owner occupied and non-owner occupied - Loans in these segments are primarily owner-occupied or income-producing properties. Loans to Real Estate Investment Trusts and unsecured loans to developers that closely correlate to the inherent risk in commercial real estate markets are also included. Commercial real estate loans are typically written with amortizing payment structures. Collateral values are determined based upon appraisals and evaluations in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines. Commercial real estate loans are primarily paid by the cash flow generated from the real property, such as operating leases, rents, or other operating cash flows from the borrower. ​ Tax Exempt - Loans in this segment primarily include loans to various state and municipal government entities. Loans made to these borrowers may provide us with tax-exempt income. While governed and underwritten similar to commercial loans they do have unique requirements based on established polices. Almost all state and municipal loans are considered a general obligation of the issuing entity. Given the size of many municipal borrowers, borrowings are normally not rated by major rating agencies. ​ Commercial and industrial loans - Loans consist of revolving and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and/or capital investment in this segment. Generally loans are secured by assets of the business such as accounts receivable, inventory, marketable securities, other liquid collateral, equipment and other business assets. Some loans in this category may be unsecured or guaranteed by government agencies such as the U.S. Small Business Administration. Loans are primarily paid by the operating cash flow of the borrower. ​ Residential real estate - All loans in this segment are collateralized by one-to-four family homes. Residential real estate loans held in the loan portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to various underwriting factors. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines. ​ Home equity - All loans and lines of credit are made to qualified individuals and are secured by senior or junior mortgage liens on owner-occupied one- to four-family homes, condominiums, or vacation homes. The home equity loan has a fixed rate and is billed as equal payments comprised of principal and interest. The home equity line of credit has a variable rate and is billed as interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the principal balance plus all accrued interest. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines. ​ Consumer other - Loans in this segment include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as auto loans, recreational equipment, overdraft protection or other consumer loans. Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines, as applicable. ​ Allowance for Credit Losses The Allowance for Credit Losses (“ACL”) is comprised of the allowance for loan losses and the allowance for unfunded commitments which is accounted for as a separate liability in other liabilities on our consolidated balance sheet. The level of the ACL represents management’s estimate of expected credit losses over the expected life of the loans at the consolidated balance sheet date. ​ The ACL is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the allowance when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged off. The ACL is comprised of reserves measured on a collective (pool) basis based on a lifetime loss-rate model when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated on an individual basis, generally larger non-accruing commercial loans. ​ ​ ​ ​ ​ ​ The activity in the ACL for the periods ended are as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At or for the Three Months Ended September 30, 2023
​ | ​ | Balance at | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Beginning of | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Balance at
(in thousands) |  | Period | ​ | Charge Offs |  | Recoveries |  | Provision |  | End of Period
Commercial construction | ​ | $ | 3,377 | ​ | $ | — | ​ | $ | — | ​ | $ | 300 | ​ | $ | 3,677
Commercial real estate owner occupied | ​ |  | 2,566 | ​ |  | — | ​ |  | — | ​ |  | (81) | ​ |  | 2,485
Commercial real estate non-owner occupied | ​ |  | 9,481 | ​ |  | — | ​ |  | — | ​ |  | 72 | ​ |  | 9,553
Tax exempt | ​ |  | 101 | ​ |  | — | ​ |  | — | ​ |  | (5) | ​ |  | 96
Commercial and industrial | ​ |  | 3,613 | ​ |  | — | ​ |  | 34 | ​ |  | 558 | ​ |  | 4,205
Residential real estate | ​ |  | 7,376 | ​ |  | — | ​ |  | 13 | ​ |  | (243) | ​ |  | 7,146
Home equity | ​ |  | 768 | ​ |  | — | ​ |  | 1 | ​ |  | (4) | ​ |  | 765
Consumer other | ​ |  | 80 | ​ |  | (74) | ​ |  | 2 | ​ |  | 76 | ​ |  | 84
Total | ​ | $ | 27,362 | ​ | $ | (74) | ​ | $ | 50 | ​ | $ | 673 | ​ | $ | 28,011
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At or for the Nine Months Ended September 30, 2023
​ | ​ | Balance at | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Beginning of | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Balance at
(in thousands) |  | Period | ​ | Charge Offs |  | Recoveries |  | Provision |  | End of Period
Commercial construction | ​ | $ | 2,579 | ​ | $ | — | ​ | $ | — | ​ | $ | 1,098 | ​ | $ | 3,677
Commercial real estate owner occupied | ​ |  | 2,189 | ​ |  | — | ​ |  | 142 | ​ |  | 154 | ​ |  | 2,485
Commercial real estate non-owner occupied | ​ |  | 9,341 | ​ |  | — | ​ |  | — | ​ |  | 212 | ​ |  | 9,553
Tax exempt | ​ |  | 93 | ​ |  | — | ​ |  | — | ​ |  | 3 | ​ |  | 96
Commercial and industrial | ​ |  | 3,493 | ​ |  | (122) | ​ |  | 86 | ​ |  | 748 | ​ |  | 4,205
Residential real estate | ​ |  | 7,274 | ​ |  | (8) | ​ |  | 28 | ​ |  | (148) | ​ |  | 7,146
Home equity | ​ |  | 811 | ​ |  | (12) | ​ |  | 5 | ​ |  | (39) | ​ |  | 765
Consumer other | ​ |  | 80 | ​ |  | (199) | ​ |  | 10 | ​ |  | 193 | ​ |  | 84
Total | ​ | $ | 25,860 | ​ | $ | (341) | ​ | $ | 271 | ​ | $ | 2,221 | ​ | $ | 28,011
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At or for the Three Months Ended September 30, 2022
​ | ​ | Balance at | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Beginning of | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Balance at
(in thousands) |  | Period | ​ | Charge Offs |  | Recoveries |  | Provision |  | End of Period
Commercial construction | ​ | $ | 1,010 | ​ | $ | — | ​ | $ | — | ​ | $ | 213 | ​ | $ | 1,223
Commercial real estate owner occupied | ​ |  | 2,722 | ​ |  | — | ​ |  | 7 | ​ |  | 132 | ​ |  | 2,861
Commercial real estate non-owner occupied | ​ |  | 7,361 | ​ |  | — | ​ |  | — | ​ |  | 610 | ​ |  | 7,971
Tax exempt | ​ |  | 105 | ​ |  | — | ​ |  | — | ​ |  | (11) | ​ |  | 94
Commercial and industrial | ​ |  | 4,820 | ​ |  | (8) | ​ |  | 20 | ​ |  | 290 | ​ |  | 5,122
Residential real estate | ​ |  | 6,806 | ​ |  | (11) | ​ |  | 6 | ​ |  | 85 | ​ |  | 6,886
Home equity | ​ |  | 865 | ​ |  | — | ​ |  | 2 | ​ |  | (76) | ​ |  | 791
Consumer other | ​ |  | 67 | ​ |  | (66) | ​ |  | 6 | ​ |  | 63 | ​ |  | 70
Total | ​ | $ | 23,756 | ​ | $ | (85) | ​ | $ | 41 | ​ | $ | 1,306 | ​ | $ | 25,018
​ ​ ​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | At or for the Nine Months Ended Septembere 30, 2022
​ | ​ | Balance at | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Beginning of | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Balance at
(in thousands) |  | Period |  | Charge Offs |  | Recoveries |  | Provision |  | End of Period
Commercial construction | ​ | $ | 2,111 | ​ | $ | — | ​ | $ | — | ​ | $ | (888) | ​ | $ | 1,223
Commercial real estate owner occupied | ​ |  | 2,751 | ​ |  | — | ​ |  | 120 | ​ |  | (10) | ​ |  | 2,861
Commercial real estate non-owner occupied | ​ |  | 5,650 | ​ |  | — | ​ |  | — | ​ |  | 2,321 | ​ |  | 7,971
Tax exempt | ​ |  | 86 | ​ |  | — | ​ |  | — | ​ |  | 8 | ​ |  | 94
Commercial and industrial | ​ |  | 5,369 | ​ |  | (14) | ​ | ​ | 56 | ​ |  | (289) | ​ |  | 5,122
Residential real estate | ​ |  | 5,862 | ​ |  | (26) | ​ |  | 103 | ​ |  | 947 | ​ |  | 6,886
Home equity | ​ |  | 814 | ​ |  | (6) | ​ |  | 22 | ​ |  | (39) | ​ |  | 791
Consumer other | ​ |  | 75 | ​ |  | (181) | ​ |  | 9 | ​ |  | 167 | ​ |  | 70
Total | ​ | $ | 22,718 | ​ | $ | (227) | ​ | $ | 310 | ​ | $ | 2,217 | ​ | $ | 25,018
​ Unfunded Commitments ​ The ACL on unfunded commitments is recognized as a liability (other liabilities on the consolidated balance sheet), with adjustments to the reserve recognized in other non-interest expense in the consolidated statement of operations. The activity in the ACL on unfunded commitments for the periods ended was as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) | ​ | Three Months Ended September 30, 2023 |  | Nine Months Ended September 30, 2023 |  | Three Months Ended September 30, 2022 |  | Nine Months Ended September 30, 2022
Beginning Balance | ​ | $ | 3,780 | ​ | $ | 3,910 | ​ | $ | 2,523 | ​ | $ | 2,152
Provision for credit losses | ​ |  | 44 | ​ |  | (86) | ​ |  | (26) | ​ |  | 345
Ending Balance | ​ | $ | 3,824 | ​ | $ | 3,824 | ​ | $ | 2,497 | ​ | $ | 2,497
​ ​ Loan Origination/Risk Management: We have certain lending policies and procedures in place designed to maximize loan income within an acceptable level of risk. Our Board of Directors reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management and the Board of Directors with frequent reports related to loan production, loan quality, and concentration of credit, loan delinquencies, non-performing loans and potential problem loans. We seek to diversify the loan portfolio as a means of managing risk associated with fluctuations in economic conditions. ​ Credit Quality Indicators: In monitoring the credit quality of the portfolio, management applies a credit quality indicator and uses an internal risk rating system to categorize commercial loans. These credit quality indicators range from one through nine, with a higher number correlating to increasing risk of loss. Consistent with regulatory guidelines, the Company provides for the classification of loans which are considered to be of lesser quality as special mention, substandard, doubtful, or loss (i.e. risk-rated 6, 7, 8 and 9, respectively). ​ The following are the definitions of our credit quality indicators: ​ Pass: Loans we consider in the commercial 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 there is a low risk of loss related to these loans considered pass-rated. ​ Special Mention: Loans considered having some potential weaknesses, but are deemed to not carry levels of risk inherent in one of the subsequent categories, are designated as special mention. A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. This might include loans which may require a higher level of supervision or internal reporting because of: (i) declining industry trends; (ii) increasing reliance on secondary sources of repayment; (iii) the poor condition of or lack of control over collateral; or (iv) failure to obtain proper documentation or any other deviations from prudent lending practices. Economic or market conditions which may, in the future, affect the obligor may warrant special mention of the asset. Loans for which an adverse trend in the borrower's operations or an imbalanced position in the balance sheet which has not reached a point where the liquidation is jeopardized may be included in this classification. Special mention loans are not adversely classified and do not expose us to sufficient risks to warrant classification. ​ Substandard: Loans we consider as substandard are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Substandard loans have a well-defined weakness that jeopardizes liquidation of the debt. Substandard loans include those loans where there is the distinct possibility of some loss of principal, if the deficiencies are not corrected. ​ Doubtful: Loans we consider as doubtful have all of the weaknesses inherent in those loans that are classified as substandard. These loans have the added characteristic of a well-defined weakness which is inadequately protected by the current sound worth and paying capacity of borrower or of the collateral pledged, if any, and calls into question the collectability of the full balance of the loan. The possibility of loss is high but because of certain important and reasonably specific pending factors, which may work to the advantage and strengthening of the loan, its classification as loss is deferred until its more exact status is determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral and refinancing plans. The entire amount of the loan might not be classified as doubtful when collection of a specific portion appears highly probable. Loans are generally not classified doubtful for an extended period of time (i.e., over a year). ​ Loss: Loans we consider as losses are those considered uncollectible and of such little value that their continuance as an asset is not warranted and the uncollectible amounts are charged-off. This classification does not mean the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this worthless asset even though partial recovery may be effected in the future. Losses are taken in the period in which they are determined to be uncollectible. ​ The following table presents our loans by year of origination, loan segmentation and risk indicator as of September 30, 2023: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
(in thousands) | ​ | 2023 | ​ | 2022 | ​ | 2021 | ​ | 2020 | ​ | 2019 | ​ | Prior | ​ | Total
Commercial construction |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Risk rating: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Pass | ​ | $ | 6,693 | ​ | $ | 94,911 | ​ | $ | 40,320 | ​ | $ | 4,567 | ​ | $ | — | ​ | $ | 932 | ​ | $ | 147,423
Special mention | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Substandard | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Total | ​ | $ | 6,693 | ​ | $ | 94,911 | ​ | $ | 40,320 | ​ | $ | 4,567 | ​ | $ | — | ​ | $ | 932 | ​ | $ | 147,423
Current period gross write-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial real estate owner occupied | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Risk rating: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Pass | ​ | $ | 47,571 | ​ | $ | 52,647 | ​ | $ | 30,018 | ​ | $ | 20,830 | ​ | $ | 22,548 | ​ | $ | 93,129 | ​ | $ | 266,743
Special mention | ​ |  | — | ​ |  | — | ​ |  | 7,486 | ​ |  | 1,634 | ​ |  | — | ​ |  | 3,127 | ​ |  | 12,247
Substandard | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 3,603 | ​ |  | 3,603
Doubtful | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 124 | ​ | ​ | 124
Total | ​ | $ | 47,571 | ​ | $ | 52,647 | ​ | $ | 37,504 | ​ | $ | 22,464 | ​ | $ | 22,548 | ​ | $ | 99,983 | ​ | $ | 282,717
Current period gross write-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial real estate non-owner occupied | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Risk rating: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Pass | ​ | $ | 32,985 | ​ | $ | 348,087 | ​ | $ | 213,568 | ​ | $ | 135,429 | ​ | $ | 80,171 | ​ | $ | 270,271 | ​ | $ | 1,080,511
Special mention | ​ |  | 7,835 | ​ |  | — | ​ |  | 13,516 | ​ |  | 28,146 | ​ |  | 15,750 | ​ |  | 8,774 | ​ |  | 74,021
Substandard | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 14,214 | ​ |  | 14,214
Doubtful | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 131 | ​ | ​ | 131
Total | ​ | $ | 40,820 | ​ | $ | 348,087 | ​ | $ | 227,084 | ​ | $ | 163,575 | ​ | $ | 95,921 | ​ | $ | 293,390 | ​ | $ | 1,168,877
Current period gross write-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Tax exempt | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Risk rating: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Pass | ​ | $ | 2,672 | ​ | $ | 12,128 | ​ | $ | 812 | ​ | $ | 209 | ​ | $ | 597 | ​ | $ | 27,829 | ​ | $ | 44,247
Special mention | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Substandard | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Total | ​ | $ | 2,672 | ​ | $ | 12,128 | ​ | $ | 812 | ​ | $ | 209 | ​ | $ | 597 | ​ | $ | 27,829 | ​ | $ | 44,247
Current period gross write-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial and industrial | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Risk rating: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Pass | ​ | $ | 57,318 | ​ | $ | 77,033 | ​ | $ | 23,295 | ​ | $ | 41,034 | ​ | $ | 17,732 | ​ | $ | 81,740 | ​ | $ | 298,152
Special mention | ​ |  | 374 | ​ |  | 1,306 | ​ |  | — | ​ |  | 7 | ​ |  | 35 | ​ |  | 3,746 | ​ |  | 5,468
Substandard | ​ |  | 59 | ​ |  | 99 | ​ |  | 191 | ​ |  | 117 | ​ |  | 105 | ​ |  | 611 | ​ |  | 1,182
Doubtful | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 88 | ​ | ​ | 1,389 | ​ | ​ | 1,477
Total | ​ | $ | 57,751 | ​ | $ | 78,438 | ​ | $ | 23,486 | ​ | $ | 41,158 | ​ | $ | 17,960 | ​ | $ | 87,486 | ​ | $ | 306,279
Current period gross write-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 5 | ​ | ​ | 117 | ​ | ​ | 122
​ ​ ​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) | ​ | 2023 | ​ | 2022 | ​ | 2021 | ​ | 2020 | ​ | 2019 | ​ | Prior | ​ | Total
Residential real estate |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Performing | ​ | $ | 58,083 | ​ | $ | 196,017 | ​ | $ | 168,614 | ​ | $ | 98,218 | ​ | $ | 64,181 | ​ | $ | 358,368 | ​ | $ | 943,481
Nonperforming | ​ |  | — | ​ |  | — | ​ |  | 42 | ​ |  | — | ​ |  | 238 | ​ |  | 3,578 | ​ |  | 3,858
Total | ​ | $ | 58,083 | ​ | $ | 196,017 | ​ | $ | 168,656 | ​ | $ | 98,218 | ​ | $ | 64,419 | ​ | $ | 361,946 | ​ | $ | 947,339
Current period gross write-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 8 | ​ | ​ | 8
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Home equity | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Performing | ​ | $ | 10,163 | ​ | $ | 16,491 | ​ | $ | 8,886 | ​ | $ | 6,634 | ​ | $ | 4,775 | ​ | $ | 40,489 | ​ | $ | 87,438
Nonperforming | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 626 | ​ |  | 626
Total | ​ | $ | 10,163 | ​ | $ | 16,491 | ​ | $ | 8,886 | ​ | $ | 6,634 | ​ | $ | 4,775 | ​ | $ | 41,115 | ​ | $ | 88,064
Current period gross write-offs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 12 | ​ | ​ | 12
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer other | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Performing | ​ | $ | 3,556 | ​ | $ | 2,061 | ​ | $ | 836 | ​ | $ | 419 | ​ | $ | 72 | ​ | $ | 892 | ​ | $ | 7,836
Nonperforming | ​ |  | — | ​ |  | — | ​ |  | 4 | ​ |  | 5 | ​ |  | — | ​ |  | — | ​ |  | 9
Total | ​ | $ | 3,556 | ​ | $ | 2,061 | ​ | $ | 840 | ​ | $ | 424 | ​ | $ | 72 | ​ | $ | 892 | ​ | $ | 7,845
Current period gross write-offs | ​ | ​ | — | ​ | ​ | 52 | ​ | ​ | 8 | ​ | ​ | 2 | ​ | ​ | — | ​ | ​ | 136 | ​ | ​ | 198
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total Loans | ​ | $ | 227,309 | ​ | $ | 800,780 | ​ | $ | 507,588 | ​ | $ | 337,249 | ​ | $ | 206,292 | ​ | $ | 913,573 | ​ | $ | 2,992,791
​ ​ The following table presents our loans by year of origination, loan segmentation and risk indicator as of December 31, 2022:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
(in thousands) | ​ | 2022 | ​ | 2021 | ​ | 2020 | ​ | 2019 | ​ | 2018 | ​ | Prior | ​ | Total
Commercial construction |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Risk rating: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Pass | ​ | $ | 49,722 | ​ | $ | 38,837 | ​ | $ | 2,865 | ​ | $ | 1,011 | ​ | $ | 964 | ​ | $ | — | ​ | $ | 93,399
Special mention | ​ |  | — | ​ |  | — | ​ |  | 24,178 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 24,178
Substandard | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Total | ​ | $ | 49,722 | ​ | $ | 38,837 | ​ | $ | 27,043 | ​ | $ | 1,011 | ​ | $ | 964 | ​ | $ | — | ​ | $ | 117,577
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial real estate owner occupied | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Risk rating: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Pass | ​ | $ | 22,371 | ​ | $ | 11,290 | ​ | $ | 23,014 | ​ | $ | 31,352 | ​ | $ | 46,398 | ​ | $ | 103,295 | ​ | $ | 237,720
Special mention | ​ |  | — | ​ |  | — | ​ |  | 243 | ​ |  | 666 | ​ |  | 173 | ​ |  | 1,870 | ​ |  | 2,952
Substandard | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 77 | ​ |  | 3,924 | ​ |  | 4,001
Doubtful | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 141 | ​ | ​ | 141
Total | ​ | $ | 22,371 | ​ | $ | 11,290 | ​ | $ | 23,257 | ​ | $ | 32,018 | ​ | $ | 46,648 | ​ | $ | 109,230 | ​ | $ | 244,814
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial real estate non-owner occupied | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Risk rating: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Pass | ​ | $ | 370,856 | ​ | $ | 228,414 | ​ | $ | 145,096 | ​ | $ | 88,111 | ​ | $ | 35,213 | ​ | $ | 238,395 | ​ | $ | 1,106,085
Special mention | ​ |  | — | ​ |  | 21,390 | ​ |  | — | ​ |  | 127 | ​ |  | 911 | ​ |  | 16,612 | ​ |  | 39,040
Substandard | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 1,404 | ​ |  | 1,404
Doubtful | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 145 | ​ | ​ | 145
Total | ​ | $ | 370,856 | ​ | $ | 249,804 | ​ | $ | 145,096 | ​ | $ | 88,238 | ​ | $ | 36,124 | ​ | $ | 256,556 | ​ | $ | 1,146,674
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Tax exempt | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Risk rating: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Pass | ​ | $ | 8,686 | ​ | $ | 1,020 | ​ | $ | 252 | ​ | $ | 772 | ​ | $ | 13,231 | ​ | $ | 18,918 | ​ | $ | 42,879
Special mention | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Substandard | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Total | ​ | $ | 8,686 | ​ | $ | 1,020 | ​ | $ | 252 | ​ | $ | 772 | ​ | $ | 13,231 | ​ | $ | 18,918 | ​ | $ | 42,879
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial and industrial | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Risk rating: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Pass | ​ | $ | 83,151 | ​ | $ | 26,948 | ​ | $ | 62,835 | ​ | $ | 27,491 | ​ | $ | 9,511 | ​ | $ | 81,316 | ​ | $ | 291,252
Special mention | ​ |  | 1,450 | ​ |  | — | ​ |  | 53 | ​ |  | 803 | ​ |  | 201 | ​ |  | 619 | ​ |  | 3,126
Substandard | ​ |  | — | ​ |  | 113 | ​ |  | 111 | ​ |  | 65 | ​ |  | 299 | ​ |  | 2,106 | ​ |  | 2,694
Doubtful | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 40 | ​ | ​ | 40
Total | ​ | $ | 84,601 | ​ | $ | 27,061 | ​ | $ | 62,999 | ​ | $ | 28,359 | ​ | $ | 10,011 | ​ | $ | 84,081 | ​ | $ | 297,112
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) | ​ | 2022 | ​ | 2021 | ​ | 2020 | ​ | 2019 | ​ | 2018 | ​ | Prior | ​ | Total
Residential real estate |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Performing | ​ | $ | 195,320 | ​ | $ | 177,480 | ​ | $ | 111,021 | ​ | $ | 69,170 | ​ | $ | 47,797 | ​ | $ | 349,795 | ​ | $ | 950,583
Nonperforming | ​ |  | — | ​ |  | 45 | ​ |  | — | ​ |  | 49 | ​ |  | 641 | ​ |  | 3,650 | ​ |  | 4,385
Total | ​ | $ | 195,320 | ​ | $ | 177,525 | ​ | $ | 111,021 | ​ | $ | 69,219 | ​ | $ | 48,438 | ​ | $ | 353,445 | ​ | $ | 954,968
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Home equity | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Performing | ​ | $ | 17,107 | ​ | $ | 10,638 | ​ | $ | 8,139 | ​ | $ | 6,830 | ​ | $ | 6,997 | ​ | $ | 40,191 | ​ | $ | 89,902
Nonperforming | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 963 | ​ |  | 963
Total | ​ | $ | 17,107 | ​ | $ | 10,638 | ​ | $ | 8,139 | ​ | $ | 6,830 | ​ | $ | 6,997 | ​ | $ | 41,154 | ​ | $ | 90,865
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer other | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Performing | ​ | $ | 4,321 | ​ | $ | 1,341 | ​ | $ | 863 | ​ | $ | 265 | ​ | $ | 64 | ​ | $ | 942 | ​ | $ | 7,796
Nonperforming | ​ |  | — | ​ |  | — | ​ |  | 5 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 5
Total | ​ | $ | 4,321 | ​ | $ | 1,341 | ​ | $ | 868 | ​ | $ | 265 | ​ | $ | 64 | ​ | $ | 942 | ​ | $ | 7,801
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total Loans | ​ | $ | 752,984 | ​ | $ | 517,516 | ​ | $ | 378,675 | ​ | $ | 226,712 | ​ | $ | 162,477 | ​ | $ | 864,326 | ​ | $ | 2,902,690
​ ​ Past Dues ​ The following is a summary of past due loans for the periods ended: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, 2023
(in thousands) |  | 30-59 |  | 60-89 |  | 90+ |  | Total Past Due |  | Current |  | Total Loans
Commercial construction | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 147,423 | ​ | $ | 147,423
Commercial real estate owner occupied | ​ |  | 246 | ​ |  | — | ​ |  | — | ​ |  | 246 | ​ |  | 282,471 | ​ |  | 282,717
Commercial real estate non-owner occupied | ​ |  | — | ​ |  | 115 | ​ |  | 871 | ​ |  | 986 | ​ |  | 1,167,891 | ​ |  | 1,168,877
Tax exempt | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 44,247 | ​ |  | 44,247
Commercial and industrial | ​ |  | 45 | ​ |  | — | ​ |  | 158 | ​ |  | 203 | ​ |  | 306,076 | ​ |  | 306,279
Residential real estate | ​ |  | 2,227 | ​ |  | 690 | ​ |  | 2,103 | ​ |  | 5,020 | ​ |  | 942,319 | ​ |  | 947,339
Home equity | ​ |  | 479 | ​ |  | 99 | ​ |  | 195 | ​ |  | 773 | ​ |  | 87,291 | ​ |  | 88,064
Consumer other | ​ |  | 22 | ​ |  | 8 | ​ |  | 3 | ​ |  | 33 | ​ |  | 7,812 | ​ |  | 7,845
Total | ​ | $ | 3,019 | ​ | $ | 912 | ​ | $ | 3,330 | ​ | $ | 7,261 | ​ | $ | 2,985,530 | ​ | $ | 2,992,791
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2022
(in thousands) |  | 30-59 |  | 60-89 |  | 90+ |  | Total Past Due |  | Current |  | Total Loans
Commercial construction | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 117,577 | ​ | $ | 117,577
Commercial real estate owner occupied | ​ |  | 385 | ​ |  | — | ​ |  | — | ​ |  | 385 | ​ |  | 244,429 | ​ |  | 244,814
Commercial real estate non-owner occupied | ​ |  | 45 | ​ |  | 145 | ​ |  | 139 | ​ |  | 329 | ​ |  | 1,146,345 | ​ |  | 1,146,674
Tax exempt | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 42,879 | ​ |  | 42,879
Commercial and industrial | ​ |  | 169 | ​ |  | — | ​ |  | 9 | ​ |  | 178 | ​ |  | 296,934 | ​ |  | 297,112
Residential real estate | ​ |  | 803 | ​ |  | 348 | ​ |  | 2,029 | ​ |  | 3,180 | ​ |  | 951,788 | ​ |  | 954,968
Home equity | ​ |  | 216 | ​ |  | 160 | ​ |  | 246 | ​ |  | 622 | ​ |  | 90,243 | ​ |  | 90,865
Consumer other | ​ |  | 41 | ​ |  | 8 | ​ |  | — | ​ |  | 49 | ​ |  | 7,752 | ​ |  | 7,801
Total | ​ | $ | 1,659 | ​ | $ | 661 | ​ | $ | 2,423 | ​ | $ | 4,743 | ​ | $ | 2,897,947 | ​ | $ | 2,902,690
​ Non-Accrual Loans ​ The following is a summary of non-accrual loans for the periods ended: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, 2023
​ | ​ | ​ | ​ | ​ | Nonaccrual With No | ​ | 90+ Days Past
(in thousands) |  | Nonaccrual |  | Related Allowance |  | Due and Accruing
Commercial construction | ​ | $ | — | ​ | $ | — | ​ | $ | —
Commercial real estate owner occupied | ​ |  | 111 | ​ |  | 108 | ​ |  | —
Commercial real estate non-owner occupied | ​ |  | 570 | ​ |  | 449 | ​ |  | 749
Tax exempt | ​ |  | — | ​ |  | — | ​ |  | —
Commercial and industrial | ​ |  | 1,596 | ​ |  | 8 | ​ |  | —
Residential real estate | ​ |  | 3,858 | ​ |  | 1,299 | ​ |  | 159
Home equity | ​ |  | 626 | ​ |  | 1 | ​ |  | 51
Consumer other | ​ |  | 9 | ​ |  | — | ​ |  | —
Total | ​ | $ | 6,770 | ​ | $ | 1,865 | ​ | $ | 959
​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2022
​ | ​ | ​ | ​ | ​ | Nonaccrual With No | ​ | 90+ Days Past
(in thousands) |  | Nonaccrual |  | Related Allowance |  | Due and Accruing
Commercial construction | ​ | $ | — | ​ | $ | — | ​ | $ | —
Commercial real estate owner occupied | ​ |  | 439 | ​ |  | 360 | ​ |  | —
Commercial real estate non-owner occupied | ​ |  | 550 | ​ |  | 411 | ​ |  | —
Tax exempt | ​ |  | — | ​ |  | — | ​ |  | —
Commercial and industrial | ​ |  | 207 | ​ |  | 145 | ​ |  | —
Residential real estate | ​ |  | 4,385 | ​ |  | 1,361 | ​ |  | 202
Home equity | ​ |  | 963 | ​ |  | 57 | ​ |  | 14
Consumer other | ​ |  | 5 | ​ |  | — | ​ |  | —
Total | ​ | $ | 6,549 | ​ | $ | 2,334 | ​ | $ | 216
​ ​ Collateral Dependent Loans Loans that do not share risk characteristics are evaluated on an individual basis. For loans that are individually evaluated and collateral dependent, financial loans where we have determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and we expect repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. ​ The following table presents the amortized cost basis of collateral-dependent loans by loan portfolio segment for the periods ended. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, 2023 | ​ | December 31, 2022
(in thousands) |  | Real Estate |  | Other |  | Real Estate |  | Other
Commercial construction | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | —
Commercial real estate owner occupied | ​ |  | 111 | ​ |  | — | ​ |  | 439 | ​ |  | —
Commercial real estate non-owner occupied | ​ |  | 570 | ​ |  | — | ​ |  | 550 | ​ |  | —
Tax exempt | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Commercial and industrial | ​ |  | 258 | ​ |  | 1,338 | ​ |  | 91 | ​ |  | 116
Residential real estate | ​ |  | 3,858 | ​ |  | — | ​ |  | 4,385 | ​ |  | —
Home equity | ​ |  | 626 | ​ |  | — | ​ |  | 963 | ​ |  | —
Consumer other | ​ |  | 9 | ​ |  | — | ​ |  | 5 | ​ |  | —
Total | ​ | $ | 5,432 | ​ | $ | 1,338 | ​ | $ | 6,433 | ​ | $ | 116
​ Loan Modifications to Borrowers Experiencing Financial Difficulty In January 2023, the Company adopted ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” which eliminated the accounting guidance for TDRs while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. This guidance was applied on a prospective basis. Upon adoption of this guidance, we are no longer required to establish a specific reserve for modifications to borrowers experiencing financial difficulty. Instead, these modifications are included in their respective category and a historical loss rate is applied to the current loan balance to arrive at the quantitative baseline portion of the ACL. ​ These modifications typically result from loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions. There were no qualifying modifications for the three and nine months ended September 30, 2022. ​ The following table presents the amortized cost basis of loans that were both experiencing financial difficulty and modified during the three and nine months ended September 30, 2023, by class and by type of modification. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) | ​ | Principal Forgiveness | ​ | Payment Delay | ​ | Term Extension | ​ | Interest Rate Reduction | ​ | Combination Interest Rate Reduction and Term Extension | ​ | % of Total Class of Loans
Three Months Ended September 30, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial construction | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | — | %
Commercial real estate owner occupied | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | — | ​
Commercial real estate non-owner occupied | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | — | ​
Tax exempt | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | — | ​
Commercial and industrial | ​ |  | — | ​ |  | 66 | ​ |  | — | ​ |  | — | ​ |  | — | ​ | 0.02 | ​
Residential real estate | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | — | ​
Home equity | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | — | ​
Consumer other | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | — | ​
Total | ​ | $ | — | ​ | $ | 66 | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | 0.00 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Nine Months Ended September 30, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial construction | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | — | %
Commercial real estate owner occupied | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | — | ​
Commercial real estate non-owner occupied | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | — | ​
Tax exempt | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | — | ​
Commercial and industrial | ​ |  | — | ​ |  | 66 | ​ |  | 1,387 | ​ |  | — | ​ |  | — | ​ | 0.47 | ​
Residential real estate | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 100 | ​ |  | — | ​ | 0.01 | ​
Home equity | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | — | ​
Consumer other | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | — | ​
Total | ​ | $ | — | ​ | $ | 66 | ​ | $ | 1,387 | ​ | $ | 100 | ​ | $ | — | ​ | 0.05 | %
​ ​ The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2023. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) | ​ | Weighted-Average Months of Payment Delay | ​ | Weighted-Average Months of Term Extension | ​ | ​ | Weighted-Average Interest Rate Reduction
Three Months Ended September 30, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial construction | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | %
Commercial real estate owner occupied | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​
Commercial real estate non-owner occupied | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​
Tax exempt | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​
Commercial and industrial | ​ | ​ | 3.00 | ​ | ​ | 3.82 | ​ | ​ | 3.75 | ​
Residential real estate | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1.38 | ​
Home equity | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​
Consumer other | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​
Total | ​ | ​ | 3.00 | ​ | ​ | 3.82 | ​ | ​ | 5.13 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Nine Months Ended September 30, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial construction | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | %
Commercial real estate owner occupied | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​
Commercial real estate non-owner occupied | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​
Tax exempt | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​
Commercial and industrial | ​ | ​ | 3.00 | ​ | ​ | 3.82 | ​ | ​ | 3.75 | ​
Residential real estate | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1.38 | ​
Home equity | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​
Consumer other | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​
Total | ​ | ​ | 3.00 | ​ | ​ | 3.82 | ​ | ​ | 5.13 | %
​ Foreclosure Residential mortgage loans collateralized by real estate that are in the process of foreclosure as of September 30, 2023 and December 31, 2022 totaled $492 thousand and $253 thousand, respectively. ​ Mortgage Banking Loans held for sale at September 30, 2023 had an unpaid principal balance of $2.0 million and there were no loans held for sale as of December 31, 2022. The interest rate exposure on loans held for sale is mitigated through forward sale commitments with certain approved secondary market investors. Forward sale commitments had a notional amount of $6.4 million at September 30, 2023, and we had no open forward sale commitments at December 31, 2022. ​ For the three months ended September 30, 2023 and 2022, we sold $20.2 million and $5.2 million, respectively, of residential mortgage loans on the secondary market, which resulted in a net gain on sale of loans (net of costs, including direct and indirect origination costs) of $14 thousand and a net loss $52 thousand, respectively. For the nine months ended September 30, 2023 and 2022, we sold $26.3 million and $38.2 million, respectively, of residential mortgage loans on the secondary market, which resulted in a net gain on sale of loans (net of costs, including direct and indirect origination costs) of $22 thousand and $281 thousand, respectively. ​ We sell residential loans on the secondary market while primarily retaining the servicing of these loans. Servicing sold loans helps to maintain customer relationships and earn fees over the servicing period. Loans serviced for others are not included in the accompanying consolidated balance sheets. The risks inherent in servicing assets relate primarily to level of prepayments that result from shifts in interest rates. We obtain third-party valuations of our servicing assets portfolio quarterly, and the assumptions are reflected in Fair Value disclosures.

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