ALLOWANCE FOR CREDIT LOSSES

3 Months Ended

Mar. 31, 2022

NOTE 6: ALLOWANCE FOR CREDIT LOSSES

The following is a rollforward of the Bank’s allowance for credit losses related to loans for the following periods:


					Initial Allowance
	Beginning		Provision for		on Acquired						Ending
(dollars in thousands)	Balance		Credit Losses		PCD Loans		Charge-offs		Recoveries		Balance
Three Months Ended March 31, 2022:
Real estate loans:
Residential properties	$	2,637	$	561	$	—	$	—	$	—	$	3,198
Commercial properties		17,049		(1,413)		—		—		—		15,636
Land and construction		1,995		(227)		—		—		—		1,768
Commercial and industrial loans		11,992		149		—		(145)		134		12,130
Consumer loans		103		(13)		—		—		—		90
Total	$	33,776	$	(943)	$		$	(145)	$	134	$	32,822

Three Months Ended March 31, 2021:
Real estate loans:
Residential properties	$	5,115	$	918	$	—	$	—	$	—	$	6,033
Commercial properties		8,711		(2,755)		—		—		—		5,956
Land and construction		892		3,070		—		—		—		3,962
Commercial and industrial loans		9,249		(2,379)		—		(214)		406		7,062
Consumer loans		233		(66)		—		—		—		167
Total	$	24,200	$	(1,212)	$	—	$	(214)	$	406	$	23,180

Year Ended December 31, 2021:
Real estate loans:
Residential properties	$	5,115	$	(1,453)	$	93	$	(1,118)	$	—	$	2,637
Commercial properties		8,711		774		7,564		—		—		17,049
Land and construction		892		1,051		52		—		—		1,995
Commercial and industrial loans		9,249		614		1,836		(706)		999		11,992
Consumer loans		233		(130)		—		—		—		103
Total	$	24,200	$	856	$	9,545	$	(1,824)	$	999	$	33,776

The following table presents the balance in the allowance for credit losses and the recorded investment in loans by impairment method as of:


	Allowance for Credit Losses
	Loans Evaluated
(dollars in thousands)	Individually		Collectively		Total
March 31, 2022:
Allowance for credit losses:
Real estate loans:
Residential properties	$	110	$	3,088	$	3,198
Commercial properties		7,662		7,974		15,636
Land and construction		69		1,699		1,768
Commercial and industrial loans		1,615		10,515		12,130
Consumer loans		—		90		90
Total	$	9,456	$	23,366	$	32,822
Loans:
Real estate loans:
Residential properties	$	8,524	$	4,201,222	$	4,209,746
Commercial properties		41,664		1,223,133		1,264,797
Land and construction		698		158,533		159,231
Commercial and industrial loans		10,220		1,743,680		1,753,900
Consumer loans		—		9,790		9,790
Total	$	61,106	$	7,336,358	$	7,397,464

December 31, 2021:
Allowance for credit losses:
Real estate loans:
Residential properties	$	111	$	2,526	$	2,637
Commercial properties		7,967		9,082		17,049
Land and construction		52		1,943		1,995
Commercial and industrial loans		2,386		9,606		11,992
Consumer loans		—		103		103
Total	$	10,516	$	23,260	$	33,776
Loans:
Real estate loans:
Residential properties	$	9,593	$	3,822,902	$	3,832,495
Commercial properties		41,313		1,268,262		1,309,575
Land and construction		694		155,232		155,926
Commercial and industrial loans		9,963		1,587,902		1,597,865
Consumer loans		—		10,867		10,867
Total	$	61,563	$	6,845,165	$	6,906,728

The following tables present risk categories of loans based on year of origination, as of:


													Revolving
(dollars in thousands)	2022		2021		2020		2019		2018		Prior		Loans		Total
March 31, 2022:
Loans secured by Real Estate:
Residential
Multifamily
Pass	$	550,899	$	1,090,423	$	842,736	$	371,305	$	223,541	$	217,085	$	—	$	3,295,989
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Total	$	550,899	$	1,090,423	$	842,736	$	371,305	$	223,541	$	217,085	$	—	$	3,295,989

Single Family
Pass	$	47,217	$	298,721	$	111,237	$	46,046	$	54,166	$	275,813	$	72,007	$	905,207
Special Mention		—		—		—		—		—		—		26		26
Substandard		—		—		—		—		—		8,296		228		8,524
Total	$	47,217	$	298,721	$	111,237	$	46,046	$	54,166	$	284,109	$	72,261	$	913,757

Commercial Real Estate
Pass	$	42,530	$	186,500	$	109,749	$	144,150	$	175,153	$	514,500	$	—	$	1,172,582
Special Mention		—		—		2		15,872		12,888		12,889		—		41,651
Substandard		—		—		872		13,637		11,054		25,001		—		50,564
Total	$	42,530	$	186,500	$	110,623	$	173,659	$	199,095	$	552,390	$	—	$	1,264,797

Land and construction
Pass	$	11,784	$	45,496	$	34,478	$	36,069	$	21,438	$	9,268	$	—	$	158,533
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		698		—		—		—		—		698
Total	$	11,784	$	45,496	$	35,176	$	36,069	$	21,438	$	9,268	$	—	$	159,231

Commercial
Pass	$	190,819	$	450,214	$	206,463	$	99,132	$	46,572	$	53,223	$	686,999	$	1,733,422
Special Mention		—		—		941		466		—		—		4,854		6,261
Substandard		4		—		2,734		1,677		1,048		2,766		5,988		14,217
Total	$	190,823	$	450,214	$	210,138	$	101,275	$	47,620	$	55,989	$	697,841	$	1,753,900

Consumer
Pass	$	54	$	1,126	$	28	$	691	$	765	$	159	$	6,829	$	9,652
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		138		—		—		—		138
Total	$	54	$	1,126	$	28	$	829	$	765	$	159	$	6,829	$	9,790

Total loans
Pass	$	843,303	$	2,072,480	$	1,304,691	$	697,393	$	521,635	$	1,070,048	$	765,835	$	7,275,385
Special Mention		—		—		943		16,338		12,888		12,889		4,880		47,938
Substandard		4		—		4,304		15,452		12,102		36,063		6,216		74,141
Total	$	843,307	$	2,072,480	$	1,309,938	$	729,183	$	546,625	$	1,119,000	$	776,931	$	7,397,464


													Revolving
(dollars in thousands)	2021		2020		2019		2018		2017		Prior		Loans		Total
December 31, 2021:
Loans secured by Real Estate:
Residential
Multifamily
Pass	$	1,092,903	$	868,483	$	418,346	$	265,872	$	141,433	$	108,529	$	—	$	2,895,566
Special Mention		—		—		1,177		—		—		—		—		1,177
Substandard		—		—		—		—		—		—		—		—
Total	$	1,092,903	$	868,483	$	419,523	$	265,872	$	141,433	$	108,529	$	—	$	2,896,743

Single Family
Pass	$	278,337	$	122,530	$	52,995	$	60,559	$	57,174	$	280,216	$	74,934	$	926,745
Special Mention		—		—		—		—		—		—		26		26
Substandard		—		—		—		—		1,873		6,830		278		8,981
Total	$	278,337	$	122,530	$	52,995	$	60,559	$	59,047	$	287,046	$	75,238	$	935,752

Commercial Real Estate
Pass	$	114,678	$	39,135	$	59,426	$	94,930	$	115,614	$	804,295	$	—	$	1,228,078
Special Mention		—		—		23,495		—		—		30,389		—		53,884
Substandard		—		—		2,934		—		2,217		22,462		—		27,613
Total	$	114,678	$	39,135	$	85,855	$	94,930	$	117,831	$	857,146	$	—	$	1,309,575

Land and construction
Pass	$	14,738	$	—	$	17,692	$	31,952	$	2,529	$	88,321	$	—	$	155,232
Special Mention		—		—		—		—		—		694		—		694
Substandard		—		—		—		—		—		—		—		—
Total	$	14,738	$	—	$	17,692	$	31,952	$	2,529	$	89,015	$	—	$	155,926

Commercial
Pass	$	471,431	$	191,405	$	88,050	$	20,709	$	5,531	$	167,201	$	636,507	$	1,580,834
Special Mention		883		1,101		833		—		—		1,370		2,790		6,977
Substandard		—		1,535		1,765		982		192		2,688		2,892		10,054
Total	$	472,314	$	194,041	$	90,648	$	21,691	$	5,723	$	171,259	$	642,189	$	1,597,865

Consumer
Pass	$	54	$	—	$	—	$	1,174	$	—	$	2,617	$	7,022	$	10,867
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Total	$	54	$	—	$	—	$	1,174	$	—	$	2,617	$	7,022	$	10,867

Total loans
Pass	$	1,972,141	$	1,221,553	$	636,509	$	475,196	$	322,281	$	1,451,179	$	718,463	$	6,797,322
Special Mention		883		1,101		25,505		—		—		32,453		2,816		62,758
Substandard		—		1,535		4,699		982		4,282		31,980		3,170		46,648
Total	$	1,973,024	$	1,224,189	$	666,713	$	476,178	$	326,563	$	1,515,612	$	724,449	$	6,906,728

The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses and the related allowance for credit losses (“ACL”) allocated to these loans:


					Equipment/					ACL
(dollars in thousands)	Real Estate		Cash		Receivables		Total			Allocation
March 31, 2022:
Loans secured by Real Estate:
Residential properties
Single family	$	2,488	$	—	$	—	$	2,488	$	—
Commercial real estate loans		2,918		—		—		2,918		—
Commercial loans		—		250		—		250		—
Total	$	5,406	$	250	$	—	$	5,656	$	—

December 31, 2021:
Loans secured by Real Estate:
Residential properties
Single family	$	2,568	$	—	$	—	$	2,568	$	—
Commercial loans		—		250		—		250		—
Total	$	2,568	$	250	$	—	$	2,818	$	—