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Loans and Asset Quality (Tables)

9 Months Ended

Sep. 30, 2024

Receivables [Abstract]

Schedule of Loans Information

Loans HFI by category and loans HFS are summarized below:

(in thousands)			September 30, 2024						December 31, 2023
Real estate:
Commercial real estate			$	875,590					$	851,582
One-to-four family residential			616,467						599,487
Construction and development			141,525						125,238
Commercial and industrial			327,069						315,327
Tax-exempt			66,436						72,913
Consumer			28,961						28,311
Total loans HFI			$	2,056,048					$	1,992,858
Total loans HFS			$	1,805					$	1,306

Schedule of Allowance for Credit Losses

The following table summarizes the activity in the ACL by category for the nine months ended September 30, 2024:

(in thousands)			Beginning Balance December 31, 2023												Provision for Credit Losses(1)						Charge-offs						Recoveries						Ending Balance September 30, 2024
Real estate:
Commercial real estate			$	9,118											$	213					$	—					$	—					$	9,331
One-to-four family residential			7,484												(978)						—						7						6,513
Construction and development			1,309												(83)						—						—						1,226
Commercial and industrial			2,553												1,813						(218)						59						4,207
Tax-exempt			575												(469)						—						—						106
Consumer			297												304						(327)						100						374
Total allowance for credit losses			$	21,336											$	800					$	(545)					$	166					$	21,757

(1)The $900,000 provision for credit losses on the consolidated statements of income for the nine months ended September 30, 2024, includes $800,000 for loans and $100,000 for unfunded loan commitments.

The following table summarizes the activity in the ACL by category for the nine months ended September 30, 2023:

(in thousands)			Beginning Balance December 31, 2022						Impact of ASC 326 Adoption						Provision for Credit Losses						Charge-offs						Recoveries						Ending Balance September 30, 2023
Real estate:
Commercial real estate			$	7,720					$	876					$	53					$	—					$	—					$	8,649
One-to-four family residential			5,682						1,231						554						—						8						7,475
Construction and development			1,654						(444)						32						(9)						—						1,233
Commercial and industrial			4,350						(822)						(562)						(51)						25						2,940
Tax-exempt			751						(427)						255						—						—						579
Consumer			471						(136)						153						(288)						107						307
Total allowance for credit losses			$	20,628					$	278					$	485					$	(348)					$	140					$	21,183

The following table summarizes the reserve for unfunded commitments for the periods indicated:

			As of and For the Nine Months Ended
(in thousands)			September 30, 2024									September 30, 2023
Reserve for unfunded commitments at beginning of period			$	442								$	—
Provision for credit losses(1,2)			100									—
Impact of ASC 326 adoption			—									442
Reserve for unfunded commitments at end of period			$	542								$	442

(1)The $900,000 provision for credit losses on the consolidated statements of income for the nine months ended September 30, 2024, includes $800,000 for loans and $100,000 for unfunded loan commitments.

(2)The $485,000 provision for credit losses on the consolidated statements of income for the nine months ended September 30, 2023, is all for loans.

Schedule of Financing Receivable, Nonaccrual

The following table presents nonaccrual loans as of September 30, 2024:

(in thousands)			Nonaccrual with No ACL						Nonaccrual with ACL						Total Nonaccrual
Real estate:
Commercial real estate			$	458					$	276					$	734
One-to-four family residential			337						252						589
Construction and development			—						920						920
Commercial and industrial			553						136						689
Tax-exempt			—						—						—
Consumer			—						91						91
Total loans HFI			$	1,348					$	1,675					$	3,023

The following table presents nonaccrual loans as of December 31, 2023:

(in thousands)			Nonaccrual with No ACL						Nonaccrual with ACL						Total Nonaccrual
Real estate:
Commercial real estate			$	—					$	714					$	714
One-to-four family residential			—						269						269
Construction and development			—						—						—
Commercial and industrial			709						135						844
Tax-exempt			—						—						—
Consumer			—						132						132
Total loans HFI			$	709					$	1,250					$	1,959

Schedule of Financing Receivable Past Due

The following table presents the aging analysis of the past due loans and loans 90 days or more past due and still accruing interest by loan category as of September 30, 2024:

			Past Due
(in thousands)			30-59 Days						60-89 Days						90 Days or More												Current						Total Loans HFI						90 Days or More Past Due and Accruing
Real estate:
Commercial real estate			$	166					$	—					$	705											$	874,719					$	875,590					$	—
One-to-four family residential			143						603						580												615,141						616,467						44
Construction and development			—						—						918												140,607						141,525						—
Commercial and industrial			28						2						674												326,365						327,069						—
Tax-exempt			—						—						—												66,436						66,436						—
Consumer			3						11						13												28,934						28,961						1
Total loans HFI			$	340					$	616					$	2,890											$	2,052,202					$	2,056,048					$	45

The following table presents the aging analysis of the past due loans and loans 90 days or more past due and still accruing interest by loan category as of December 31, 2023:

			Past Due
(in thousands)			30-59 Days						60-89 Days						90 Days or More												Current						Total Loans HFI						90 Days or More Past Due and Accruing
Real estate:
Commercial real estate			$	36					$	—					$	678											$	850,868					$	851,582					$	—
One-to-four family residential			392						251						409												598,435						599,487						260
Construction and development			—						—						265												124,973						125,238						265
Commercial and industrial			132						60						847												314,288						315,327						45
Tax-exempt			—						—						—												72,913						72,913						—
Consumer			27						16						46												28,222						28,311						4
Total loans HFI			$	587					$	327					$	2,245											$	1,989,699					$	1,992,858					$	574

Schedule of Financing Receivable by Credit Risk

The following table summarizes loans by risk rating and year of origination as of September 30, 2024, and gross charge-offs for the nine months ended September 30, 2024:

			Year of Origination
(in thousands)			2024						2023						2022						2021						2020						Prior Years						Revolving Lines						Total
Real estate:
Commercial real estate
Pass			$	110,418					$	110,026					$	237,793					$	221,675					$	70,707					$	90,857					$	26,310					$	867,786
Special Mention			3,073						227						1,494						—						—						661						—						5,455
Substandard			—						183						747						684						—						735						—						2,349
Total			$	113,491					$	110,436					$	240,034					$	222,359					$	70,707					$	92,253					$	26,310					$	875,590
One-to-four family residential
Pass			$	76,264					$	109,718					$	121,231					$	116,108					$	81,318					$	90,646					$	17,885					$	613,170
Special Mention			131						—						—						807						—						257						—						1,195
Substandard			—						—						372						43						34						843						810						2,102
Total			$	76,395					$	109,718					$	121,603					$	116,958					$	81,352					$	91,746					$	18,695					$	616,467
Construction and development
Pass			$	41,907					$	64,646					$	25,662					$	4,206					$	802					$	1,754					$	1,377					$	140,354
Special Mention			—						—						—						—						—						—						—						—
Substandard			—						918						—						—						—						253						—						1,171
Total			$	41,907					$	65,564					$	25,662					$	4,206					$	802					$	2,007					$	1,377					$	141,525
Commercial and industrial
Pass			$	57,633					$	53,224					$	34,515					$	42,115					$	9,120					$	2,909					$	124,746					$	324,262
Special Mention			192						—						1,250						—						—						—						564						2,006
Substandard			26						3						31						12						2						84						643						801
Total			$	57,851					$	53,227					$	35,796					$	42,127					$	9,122					$	2,993					$	125,953					$	327,069
Tax-exempt
Pass			$	2,487					$	1,606					$	14,977					$	6,625					$	11,123					$	29,618					$	—					$	66,436
Special Mention			—						—						—						—						—						—						—						—
Substandard			—						—						—						—						—						—						—						—
Total			$	2,487					$	1,606					$	14,977					$	6,625					$	11,123					$	29,618					$	—					$	66,436
Consumer
Pass			$	13,107					$	8,834					$	3,611					$	1,480					$	419					$	215					$	1,187					$	28,853
Special Mention			—						—						—						—						—						—						—						—
Substandard			—						10						—						—						—						91						7						108
Total			$	13,107					$	8,844					$	3,611					$	1,480					$	419					$	306					$	1,194					$	28,961
Total loans HFI			$	305,238					$	349,395					$	441,683					$	393,755					$	173,525					$	218,923					$	173,529					$	2,056,048
Gross charge-offs			$	7					$	27					$	27					$	1					$	—					$	153					$	330					$	545

As of December 31, 2023, the Company had no loans classified as doubtful or loss. The following table summarizes loans by risk rating and year of origination as of December 31, 2023, and gross charge-offs for the year ended December 31, 2023:

			Year of Origination
(in thousands)			2023						2022						2021						2020						2019						Prior Years						Revolving Lines						Total
Real estate:
Commercial real estate
Pass			$	124,134					$	256,707					$	239,364					$	76,754					$	63,475					$	61,957					$	18,467					$	840,858
Special Mention			73						—						3,186						—						1,031						4,082						—						8,372
Substandard			184						779						675						—						—						714						—						2,352
Total			$	124,391					$	257,486					$	243,225					$	76,754					$	64,506					$	66,753					$	18,467					$	851,582
One-to-four family residential
Pass			$	122,004					$	134,583					$	129,388					$	90,190					$	31,110					$	74,077					$	16,472					$	597,824
Special Mention			—						—						—						—						—						261						—						261
Substandard			—						79						—						37						385						827						74						1,402
Total			$	122,004					$	134,662					$	129,388					$	90,227					$	31,495					$	75,165					$	16,546					$	599,487
Construction and development
Pass			$	54,189					$	55,515					$	10,333					$	1,742					$	2,158					$	1,015					$	286					$	125,238
Special Mention			—						—						—						—						—						—						—						—
Substandard			—						—						—						—						—						—						—						—
Total			$	54,189					$	55,515					$	10,333					$	1,742					$	2,158					$	1,015					$	286					$	125,238
Commercial and industrial
Pass			$	73,653					$	49,637					$	51,012					$	13,863					$	7,409					$	813					$	107,171					$	303,558
Special Mention			1,208						937						4,659						—						310						509						3,173						10,796
Substandard			4						—						59						5						54						51						800						973
Total			$	74,865					$	50,574					$	55,730					$	13,868					$	7,773					$	1,373					$	111,144					$	315,327
Tax-exempt
Pass			$	959					$	15,679					$	8,174					$	13,919					$	4,250					$	29,932					$	—					$	72,913
Special Mention			—						—						—						—						—						—						—						—
Substandard			—						—						—						—						—						—						—						—
Total			$	959					$	15,679					$	8,174					$	13,919					$	4,250					$	29,932					$	—					$	72,913
Consumer
Pass			$	16,947					$	6,385					$	2,325					$	858					$	363					$	133					$	1,173					$	28,184
Special Mention			—						—						—						—						—						—						—						—
Substandard			—						29						—						—						—						90						8						127
Total			$	16,947					$	6,414					$	2,325					$	858					$	363					$	223					$	1,181					$	28,311
Total loans HFI			$	393,355					$	520,330					$	449,175					$	197,368					$	110,545					$	174,461					$	147,624					$	1,992,858
Gross charge-offs			$	12					$	20					$	1					$	—					$	10					$	25					$	405					$	473

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