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Loans and Allowance for Credit Losses on Loans (Tables)
 9 Months Ended
Sep. 30, 2022
Receivables [Abstract]  
Schedule of Loans by Class
The following table presents the amortized cost of loans by class as of September 30, 2022 and December 31, 2021.

(in thousands)September 30, 2022December 31, 2021
Commercial and industrial$207,488 $301,602 
Real estate:
  Commercial owner-occupied368,415 392,345 
  Commercial investor-owned1,211,651 1,189,021 
  Construction112,154 119,840 
  Home equity89,244 88,746 
  Other residential114,247 114,558 
Installment and other consumer loans55,137 49,533 
Total loans, at amortized cost 1
2,158,336 2,255,645 
Allowance for credit losses on loans(22,963)(23,023)
Total loans, net of allowance for credit losses on loans$2,135,373 $2,232,622 
1 Amortized cost includes net deferred loan origination costs (fees) of $1.6 million and $(901) thousand at September 30, 2022 and December 31, 2021, respectively. Amounts are also net of unrecognized purchase discounts of $2.6 million and $2.5 million at September 30, 2022 and December 31, 2021, respectively. Amortized cost excludes accrued interest, which totaled $5.8 million and $7.1 million at September 30, 2022 and December 31, 2021, respectively, and is included in interest receivable and other assets in the consolidated statements of condition.
Financing Receivable Credit Quality Indicators
The following tables present the loan portfolio by loan class, origination year and internal risk rating as of September 30, 2022 and December 31, 2021. We early adopted the vintage disclosure requirements of ASU 2022-02 prospectively as described in Note 2 beginning with the first quarter of 2022. Accordingly, the 2022 vintage table reflects gross charge-offs by loan class and year of origination. Generally, existing term loans that were re-underwritten are reflected in the table in the year of renewal. Lines of credit that have a conversion feature at the time of origination, such as construction to perm loans, are presented by year of origination.
(in thousands)Term Loans - Amortized Cost by Origination YearRevolving Loans Amortized Cost
September 30, 202220222021202020192018PriorTotal
Commercial and industrial:
Pass and Watch$10,791 $11,634 $8,266 $22,979 $6,007 $25,989 $114,750 $200,416 
Special Mention— — — 477 4,166 — 403 5,046 
Substandard— — 1,361 — — 665 — 2,026 
Total commercial and industrial$10,791 $11,634 $9,627 $23,456 $10,173 $26,654 $115,153 $207,488 
Gross current period charge-offs$— $— $(9)$— $— $— $— $(9)
Commercial real estate, owner-occupied:
Pass and Watch$52,024 $52,909 $41,096 $45,607 $30,178 $108,888 $— $330,702 
Special Mention— 16,336 — 309 5,284 4,532 — 26,461 
Substandard— — 7,127 1,758 — 2,266 — 11,151 
Doubtful— — 101 — — — — 101 
Total commercial real estate, owner-occupied$52,024 $69,245 $48,324 $47,674 $35,462 $115,686 $— $368,415 
(in thousands)Term Loans - Amortized Cost by Origination YearRevolving Loans Amortized Cost
September 30, 202220222021202020192018PriorTotal
Commercial real estate, investor-owned:
Pass and Watch$157,021 $219,857 $156,190 $165,464 $128,149 $332,987 $65 $1,159,733 
Special Mention— 1,178 12,157 3,961 6,002 9,384 — 32,682 
Substandard— — — — — 19,236 — 19,236 
Total commercial real estate, investor-owned$157,021 $221,035 $168,347 $169,425 $134,151 $361,607 $65 $1,211,651 
Construction:
Pass and Watch$42,163 $16,897 $36,239 $7,744 $9,111 $— $— $112,154 
Total construction$42,163 $16,897 $36,239 $7,744 $9,111 $— $— $112,154 
Home equity:
Pass and Watch$— $— $— $— $— $742 $87,685 $88,427 
Substandard— — — — — 499 318 817 
Total home equity$— $— $— $— $— $1,241 $88,003 $89,244 
Other residential:
Pass and Watch$16,623 $15,383 $29,942 $22,385 $11,438 $18,476 $— $114,247 
Total other residential$16,623 $15,383 $29,942 $22,385 $11,438 $18,476 $— $114,247 
Installment and other consumer:
Pass and Watch15,579 $14,591 $6,168 $6,837 $4,428 $6,656 $786 $55,045 
Substandard— — — — — 92 — 92 
Total installment and other consumer$15,579 $14,591 $6,168 $6,837 $4,428 $6,748 $786 $55,137 
Gross current period charge-offs$— $— $— $— $— $(18)$(5)$(23)
Total loans:
Pass and Watch$294,201 $331,271 $277,901 $271,016 $189,311 $493,738 $203,286 $2,060,724 
Total Special Mention$— $17,514 $12,157 $4,747 $15,452 $13,916 $403 $64,189 
Total Substandard$— $— $8,488 $1,758 $— $22,758 $318 $33,322 
Total Doubtful$— $— $101 $— $— $— $— $101 
Totals$294,201 $348,785 $298,647 $277,521 $204,763 $530,412 $204,007 $2,158,336 
Total gross current period charge-offs$— $— $(9)$— $— $(18)$(5)$(32)

(in thousands)Term Loans - Amortized Cost by Origination YearRevolving Loans Amortized Cost
December 31, 202120212020201920182017PriorTotal
Commercial and industrial:
Pass and Watch$96,643 $35,967 $25,754 $12,763 $2,729 $31,280 $90,744 $295,880 
Special Mention— 1,700 584 273 — — 2,088 4,645 
Substandard— — — — — — 1,077 1,077 
Total commercial and industrial$96,643 $37,667 $26,338 $13,036 $2,729 $31,280 $93,909 $301,602 
Commercial real estate, owner-occupied:
Pass and Watch$58,395 $43,216 $49,485 $36,174 $42,430 $104,898 $— $334,598 
Special Mention16,748 — — 7,846 — 16,996 — 41,590 
Substandard— 7,155 285 — — 8,603 — 16,043 
Doubtful— 114 — — — — — 114 
Total commercial real estate, owner-occupied$75,143 $50,485 $49,770 $44,020 $42,430 $130,497 $— $392,345 
Commercial real estate, investor-owned:
Pass and Watch$225,722 $186,214 $187,418 $143,028 $75,419 $325,882 $84 $1,143,767 
Special Mention— 1,214 2,714 11,773 1,787 9,540 — 27,028 
Substandard— — — 695 — 17,531 — 18,226 
Total commercial real estate, investor-owned$225,722 $187,428 $190,132 $155,496 $77,206 $352,953 $84 $1,189,021 
Construction:
Pass and Watch$31,269 $70,528 $8,935 $9,108 $— $— $— $119,840 
Total construction$31,269 $70,528 $8,935 $9,108 $— $— $— $119,840 
Home equity:
Pass and Watch$— $— $— $— $10 $268 $87,693 $87,971 
Substandard— — — — — 377 398 775 
Total home equity$— $— $— $— $10 $645 $88,091 $88,746 
Other residential:
Pass and Watch$15,800 $31,981 $25,529 $15,411 $7,964 $17,873 $— $114,558 
Total other residential$15,800 $31,981 $25,529 $15,411 $7,964 $17,873 $— $114,558 
Installment and other consumer:
Pass and Watch$17,207 $7,748 $9,436 $5,633 $1,123 $6,620 $1,766 $49,533 
Total installment and other consumer$17,207 $7,748 $9,436 $5,633 $1,123 $6,620 $1,766 $49,533 
Total loans:
Pass and Watch$445,036 $375,654 $306,557 $222,117 $129,675 $486,821 $180,287 $2,146,147 
Total Special Mention$16,748 $2,914 $3,298 $19,892 $1,787 $26,536 $2,088 $73,263 
Total Substandard$— $7,155 $285 $695 $— $26,511 $1,475 $36,121 
Doubtful$— $114 $— $— $— $— $— $114 
Totals$461,784 $385,837 $310,140 $242,704 $131,462 $539,868 $183,850 $2,255,645 
Past Due Financing Receivables
The following table shows the amortized cost of loans by class, payment aging and non-accrual status as of September 30, 2022 and December 31, 2021.
Loan Aging Analysis by Class
(in thousands)Commercial and industrialCommercial real estate, owner-occupiedCommercial real estate, investor-ownedConstructionHome equityOther residentialInstallment and other consumerTotal
September 30, 2022        
 30-59 days past due$1,007 $— $— $— $520 $— $— $1,527 
 60-89 days past due1,474 — — — 360 — — 1,834 
 90 days or more past due255 — — — 54 — — 309 
Total past due2,736 — — — 934 — — 3,670 
Current204,752 368,415 1,211,651 112,154 88,310 114,247 55,137 2,154,666 
Total loans 1
$207,488 $368,415 $1,211,651 $112,154 $89,244 $114,247 $55,137 $2,158,336 
Non-accrual loans 2
$— $9,846 $— $— $699 $— $92 $10,637 
Non-accrual loans with no allowance$— $9,846 $— $— $699 $— $92 $10,637 
December 31, 2021        
 30-59 days past due$2 $— $— $— $498 $— $1,036 $1,536 
 60-89 days past due394 — — — 67 — — 461 
 90 days or more past due229 — — — 88 — — 317 
Total past due625 — — — 653 — 1,036 2,314 
Current300,977 392,345 1,189,021 119,840 88,093 114,558 48,497 2,253,331 
Total loans 1
$301,602 $392,345 $1,189,021 $119,840 $88,746 $114,558 $49,533 $2,255,645 
Non-accrual loans 2
$— $7,269 $694 $— $413 $— $— $8,376 
Non-accrual loans with no allowance$— $7,269 $694 $— $413 $— $— $8,376 
1 There were no non-performing loans past due more than ninety days and accruing interest as of September 30, 2022 and December 31, 2021.
2 None of the non-accrual loans as of September 30, 2022 or December 31, 2021 were earning interest on a cash basis. We recognized no interest income on non-accrual loans for the three and nine months ended September 30, 2022 and 2021. Accrued interest of $47 thousand was reversed from interest income for loans that were placed on non-accrual during the nine months ended September 30, 2022. No interest income was reversed for the single loan that was placed on non-accrual during the nine months ended September 30, 2021.
Schedule of Collateral Dependent Loans
The following table presents the amortized cost basis of individually analyzed collateral-dependent loans, which are all on non-accrual status, by class at September 30, 2022 and December 31, 2021.
Amortized Cost by Collateral Type
(in thousands)Commercial Real EstateResidential Real EstateOther
Total 1
Allowance for Credit Losses
September 30, 2022
Commercial real estate, owner-occupied$9,846 $— $— $9,846 $— 
Home equity— 699 — 699 — 
Installment and other consumer— — 92 92 — 
Total$9,846 $699 $92 $10,637 $— 
December 31, 2021
Commercial real estate, owner-occupied$7,269 $— $— $7,269 $— 
Commercial real estate, investor-owned694 — — 694 — 
Home equity— 413 — 413 — 
Total$7,963 $413 $— $8,376 $— 
1 There were no collateral-dependent residential real estate mortgage loans in process of foreclosure or in substance repossessed at September 30, 2022 or December 31, 2021. The weighted average loan-to-value of collateral dependent loans was approximately 66% at September 30, 2022 and 67% at December 31, 2021.
Troubled Debt Restructurings on Financing Receivables
The following table summarizes the amortized cost of TDR loans by loan class as of September 30, 2022 and December 31, 2021.
(in thousands)September 30, 2022December 31, 2021
Commercial and industrial$941 $1,183 
Commercial real estate, owner-occupied9,436 7,155 
Commercial real estate, investor-owned165 179 
Home equity629 386 
Installment and other consumer561 607 
Total 1
$11,732 $9,510 
1 TDR loans on non-accrual status totaled $9.9 million and $7.4 million at September 30, 2022 and December 31, 2021, respectively. Unfunded commitments for TDR loans totaled $218 thousand and $441 thousand as of September 30, 2022 and December 31, 2021, respectively.


The following table presents information for loans modified in a TDR during the presented periods, including the number of modified contracts, the amortized cost of the loans prior to modification, and the amortized cost of the loans at period end after being restructured. The table excludes fully charged-off TDR loans and loans modified in a TDR and subsequently paid-off during the years presented, if applicable.
(dollars in thousands)Number of Contracts ModifiedPre-Modification Outstanding Recorded InvestmentPost-Modification Outstanding Recorded InvestmentPost-Modification Outstanding Recorded Investment at Period End
TDRs during the three months ended September 30, 2022:  
Commercial real estate, owner occupied2 $2,308 $2,308 $2,308 
Home equity2 147 147 147 
Total4 $2,455 $2,455 $2,455 
TDRs during the three months ended September 30, 2021:
Commercial and industrial1 $1,101 $1,101 $1,101 
(dollars in thousands)Number of Contracts ModifiedPre-Modification Outstanding Recorded InvestmentPost-Modification Outstanding Recorded InvestmentPost-Modification Outstanding Recorded Investment at Period End
TDRs during the nine months ended September 30, 2022:  
Commercial real estate, owner occupied2 $2,308 $2,308 $2,308 
Home equity3 247 247 247 
Total5 $2,555 $2,555 $2,555 
TDRs during the nine months ended September 30, 2021:
Commercial and industrial1 $1,101 $1,101 $1,101 
Allowance for Credit Losses on Financing Receivables
The following table discloses activity in the allowance for credit losses on loans for the periods presented.
Allowance for Credit Losses on Loans Rollforward
(in thousands)Commercial and industrialCommercial real estate, owner-occupiedCommercial real estate, investor-ownedConstructionHome equityOther residentialInstallment and other consumerUnallocatedTotal
Three months ended September 30, 2022
Beginning balance$1,699 $2,617 $12,439 $1,737 $530 $585 $733 $2,199 $22,539 
Provision (reversal)265 (81)299 38 12 5 83 (199)422 
Charge-offs(9)— — — — — (1)— (10)
Recoveries3 — — 9 — — — — 12 
Ending balance$1,958 $2,536 $12,738 $1,784 $542 $590 $815 $2,000 $22,963 
Three months ended September 30, 2021
Beginning balance$1,590 $2,037 $10,761 $1,142 $412 $613 $238 $2,307 $19,100 
Provision (reversal) 126 (30)1,011 77 247 4 384 (19)1,800 
Initial allowance for PCD loans405 559 533 — — 6 2 — 1,505 
Charge-offs— — — — — — (2)— (2)
Recoveries3 — — 8 — — — — 11 
Ending balance$2,124 $2,566 $12,305 $1,227 $659 $623 $622 $2,288 $22,414 
Allowance for Credit Losses on Loans Rollforward
(in thousands)Commercial and industrialCommercial real estate, owner-occupiedCommercial real estate, investorConstructionHome equityOther residentialInstallment and other consumerUnallocatedTotal
Nine months ended September 30, 2022
Beginning balance$1,709 $2,776 $12,739 $1,653 $595 $644 $621 $2,286 $23,023 
Provision (reversal) 248 (240)(1)106 (53)(54)217 (286)(63)
Charge-offs(9)— — — — — (23)— (32)
Recoveries10 — — 25 — — — — 35 
Ending balance$1,958 $2,536 $12,738 $1,784 $542 $590 $815 $2,000 $22,963 
Nine months ended September 30, 2021
Beginning balance$2,530 $2,778 $12,682 $1,557 $738 $998 $291 $1,300 $22,874 
Provision (reversal) (821)(771)(910)(356)(129)(381)331 988 (2,049)
Initial allowance for PCD loans405 559 533 — — 6 2 — 1,505 
Charge-offs— — — — — — (2)— (2)
Recoveries10 — — 26 50 — — — 86 
Ending balance$2,124 $2,566 $12,305 $1,227 $659 $623 $622 $2,288 $22,414