Loans and Allowance for Credit Losses

12 Months Ended

Dec. 31, 2024

Note 4. Loans and Allowance for Credit Losses

The following table presents the amortized cost of loans held for investment as of the dates stated.


	December 31,
(Dollars in thousands)	2024		2023
Commercial and industrial	$	354,904	$	508,944
Real estate – construction, commercial		114,491		180,052
Real estate – construction, residential		51,807		75,832
Real estate – commercial		847,842		870,540
Real estate – residential		692,253		730,110
Real estate – farmland		5,520		5,470
Consumer		43,938		59,169
Gross loans held for investment		2,110,755		2,430,117
Deferred costs, net of loan fees		1,042		830
Total	$	2,111,797	$	2,430,947

The Company has pledged certain commercial and residential mortgages as collateral for borrowings with the FHLB. Loans totaling $797.9 million and $767.1 million were pledged as of December 31, 2024 and 2023, respectively. The Company has pledged certain construction, and commercial and industrial loans totaling $91.6 million and $161.0 million as collateral for borrowings with the FRB Discount Window as of December 31, 2024 and 2023, respectively. The decline in the amount pledged at the FRB Discount Window was primarily due to paydowns and payoffs of the commercial and industrial loans serving as collateral.

The following tables present the aging of the recorded investment of loans held for investment by loan category as of the dates stated.


	December 31, 2024
(Dollars in thousands)	Current Loans		30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due & Accruing		Nonaccrual		Total Loans
Commercial and industrial	$	339,893	$	1,335	$	1,232	$	2,259	$	10,185	$	354,904
Real estate – construction, commercial		114,238		—		33		—		220		114,491
Real estate – construction, residential		51,807		—		—		—		—		51,807
Real estate – commercial		842,982		625		—		—		4,235		847,842
Real estate – residential		680,406		3,874		476		—		7,497		692,253
Real estate – farmland		5,520		—		—		—		—		5,520
Consumer		41,295		1,296		300		227		820		43,938
Deferred costs, net of loan fees		1,042		—		—		—		—		1,042
Total	$	2,077,183	$	7,130	$	2,041	$	2,486	$	22,957	$	2,111,797


	December 31, 2023
(Dollars in thousands)	Current Loans		30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due & Accruing		Nonaccrual		Total Loans
Commercial and industrial	$	464,939	$	2,235	$	632	$	1,709	$	39,429	$	508,944
Real estate – construction, commercial		177,653		2,016		—		—		383		180,052
Real estate – construction, residential		75,309		523		—		—		—		75,832
Real estate – commercial		855,263		2,109		714		574		11,880		870,540
Real estate – residential		717,141		5,101		288		—		7,580		730,110
Real estate – farmland		5,470		—		—		—		—		5,470
Consumer		55,084		2,298		279		754		754		59,169
Deferred costs, net of loan fees		830		—		—		—		—		830
Total	$	2,351,689	$	14,282	$	1,913	$	3,037	$	60,026	$	2,430,947

Nonaccrual loans as of December 31, 2023 included a nonperforming specialty finance loan (reported as commercial and industrial) with a recorded investment of $32.8 million. In the second quarter of 2024, the Company executed an agreement to sell this loan to a third party, reclassifying the loan from loans held for investment to loans held for sale in the same period at its estimated fair value. Upon reclassification, the Company recorded a charge-off of $9.4 million on the loan, which was provisioned for in prior years. In the third quarter of 2024, the sale was completed upon the receipt of all contractual amounts due and, as result, the Company recorded an $8.4 million recovery of credit losses.

The following tables present the recorded investment of nonaccrual loans held for investment with and without an ACL by loan category as of the dates stated.


	December 31, 2024
(Dollars in thousands)	Nonaccrual Loans with No ACL		Nonaccrual Loans with an ACL		Total Nonaccrual Loans
Commercial and industrial	$	778	$	9,407	$	10,185
Real estate – construction, commercial		—		220		220
Real estate – commercial		—		4,235		4,235
Real estate – residential		1,669		5,828		7,497
Consumer		—		820		820
Total	$	2,447	$	20,510	$	22,957


	December 31, 2023
(Dollars in thousands)	Nonaccrual Loans with No ACL		Nonaccrual Loans with an ACL		Total Nonaccrual Loans
Commercial and industrial	$	1,487	$	37,942	$	39,429
Real estate – construction, commercial		—		383		383
Real estate – commercial		2,024		9,856		11,880
Real estate – residential		577		7,003		7,580
Consumer		—		754		754
Total	$	4,088	$	55,938	$	60,026

For the year ended December 31, 2024 and 2023, the Company recognized $534 thousand and $223 thousand, respectively, of interest income from nonaccrual loans.

The following table presents accrued interest receivable by loan type reversed from interest income associated with loans held for investment that were placed on nonaccrual status for the periods stated.


	For the twelve months ended December 31,
(Dollars in thousands)	2024		2023
Commercial and industrial	$	417	$	179
Real estate – construction, commercial		60		7
Real estate – construction, residential		—		29
Real estate – commercial		176		300
Real estate – residential		93		80
Consumer		23		16
Total	$	769	$	611

Credit Quality Indicators

The Company segments loans held for investment into risk categories based on relevant information about the expected ability of borrowers to repay debt, such as current financial information, historical payment performance, experience, collateral adequacy, credit documentation, and current economic trends, among other factors. Management assigns loan risk grades by a numerical system as an indication of credit quality of its portfolio of loans held for investment. The Company uses the following definitions for loan risk ratings and periodically evaluates the appropriateness of these ratings across its loan portfolio. Independent third-party loan reviews are performed periodically on the Company's loan portfolio and such reviews validate management's determination of loan risk grades. Bank regulatory agencies also periodically review the Company's loan portfolio, including loan risk grades and may, on occasion, change a grade based on their judgment of the facts at the time of review.

Risk Grade 1 – Strong: This grade is for the strongest of loans. These loans are extended to individuals or businesses where the probability of default is extremely low to the Bank and secured with liquid collateral where the loss given default is unlikely because of the source of repayment such as a lien on a deposit account held at the Bank. Character, credit history, and ability of individuals or company principals are excellent. High liquidity, minimum risk, strong ratios, and low servicing cost are present.

Risk Grade 2 – Minimal: This grade is for loans deemed exceptionally strong. These loans are within established guidelines and where the borrowers have documented significant overall financial strength with consistent and predictable cash flows. These loans have excellent sources of repayment, significant balance sheet liquidity, no significant identifiable risk of collection, and conform in all respects to policy, underwriting standards, and federal and state regulations (no exceptions of any kind). In addition, guarantor support, when provided, is deemed as excellent.

Risk Grade 3 – Acceptable: This grade is for loans deemed strong. These loans have adequate sources of repayment, with a minimal identifiable risk of collection. Generally, loans assigned this risk grade will demonstrate the following characteristics: (1) conformity in all respects with policy, guidelines, underwriting standards, and federal and state regulations (no exceptions of any kind), (2) documented historical cash flow that meets or exceeds required minimum guidelines, or that can be supplemented with verifiable cash flow from other sources, and (3) adequate secondary sources to liquidate the debt. In addition, guarantor support, when provided, is deemed strong.

Risk Grade 4 – Satisfactory: This grade is for satisfactory loans containing more but deemed acceptable risk, and where the borrower is deemed as sound. These loans have adequate sources of repayment, with minimal identifiable risk of collection. Loans assigned with this risk grade will demonstrate the following characteristics: (1) general conformity to the Bank's underwriting requirements, with limited exceptions to policy, product, or underwriting guidelines. All exceptions noted have documented mitigating factors that offset any additional risk associated with the exceptions noted, (2) documented historical cash flow that meets or exceeds required minimum guidelines, or that can be supplemented with verifiable cash flow from other sources, and (3) adequate secondary sources to liquidate the debt. In addition, guarantor support, when provided, is deemed as satisfactory.

Risk Grade 5 – Watch: This grade is for satisfactory loans containing acceptable but elevated risk. These loans are characterized by borrowers who exhibit signs of financial stress or are experiencing unstable or unfavorable change(s) adversely impacting the current or expected financial condition. The borrower's management is considered to be satisfactory; however, the collateral securing the loan may have decreased in value, the debt service coverage ratio is

inconsistent or breakeven but mostly positive, and/or guarantor support, if any, is deemed limited or marginal. Loans classified as Watch warrant additional monitoring by management.

Risk Grade 6 – Special Mention: This grade is for loans that have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the Bank's credit position potentially at a future date. Special Mention loans are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. Special Mention credits typically do not conform to established guidelines and/or exceptions without mitigating factors, or have emerging weaknesses that may or may not be remedied with the passage of time.

Risk Grade 7 – Substandard: This grade is for loans inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as Substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt; characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. The probability of default is highly likely and may have already occurred. Loans in this category are characterized by deterioration in quality exhibited by any number of well-defined weaknesses requiring corrective action. The weaknesses may include, but are not limited to: (1) current or expected unprofitable operations, (2) inadequate debt service coverage, (3) declining or inadequate liquidity, (4) improper loan structure, (5) questionable or weak repayment sources, and (6) lack of well-defined secondary repayment source. There is a distinct possibility of loss and the Bank will sustain loss if the deficiencies remain uncorrected.

Risk Grade 8 – Doubtful: Loans classified Doubtful have all the weaknesses inherent in loans classified Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values highly questionable and improbable. However, these loans are not yet rated as loss because certain events may occur which would salvage the Bank's position, which can include, but not limited to (1) an injection of capital, (2) alternative financing, and (3) liquidation of assets or the pledging of additional collateral. Doubtful is a temporary grade, where the Bank expects a loss but is presently not quantified with any degree of accuracy. Once the loss position is determined, the amount is recorded and charged off against the ACL.

Risk Grade 9 – Loss: Loans classified Loss are deemed uncollectible and of such little value that continuance as assets held for investment is no longer warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer charging off the worthless loan, even though partial recovery may occur in the future. Probable loss amounts, either principal or interest, deemed uncollectible are charged off promptly against the ACL.

The following table presents the recorded investment of loans held for investment by internal loan risk grade by year of origination as of December 31, 2024. There were no loans classified as loss (risk grade 9) as of the same date. Also presented are gross charge-offs by loan type and origination year for the year ended December 31, 2024.


	Term Loans Recorded Investment Basis by Origination Year
(Dollars in thousands)	2024		2023		2022		2021		2020		Prior		Revolving Loans		Total
Commercial and industrial
Risk Grades 1 - 4	$	13,883	$	13,559	$	64,530	$	14,600	$	17,405	$	15,760	$	98,867	$	238,604
Risk Grades 5 - 6		672		24,430		37,503		10,201		5,183		979		15,092		94,060
Risk Grade 7		944		2,248		5,173		10,462		562		1,247		1,521		22,157
Risk Grade 8		—		—		—		82		—		1		—		83
Total		15,499		40,237		107,206		35,345		23,150		17,987		115,480		354,904
Current period gross charge-offs		73		475		19,008		2,667		1,015		171		596		24,005

Real estate – construction, commercial
Risk Grades 1 - 4		6,219		6,277		65,560		7,776		5,405		4,792		399		96,428
Risk Grades 5 - 6		—		1,090		—		7,567		4,770		4,235		—		17,662
Risk Grade 7		—		116		—		24		—		261		—		401
Total		6,219		7,483		65,560		15,367		10,175		9,288		399		114,491
Current period gross charge-offs		—		—		—		—		—		—		—		—

Real estate – construction, residential
Risk Grades 1 - 4		19,574		8,861		7,837		13,971		—		57		990		51,290
Risk Grades 5 - 6		193		—		—		—		—		—		—		193
Risk Grade 7		—		169		155		—		—		—		—		324
Total		19,767		9,030		7,992		13,971		—		57		990		51,807
Current period gross charge-offs		—		—		—		—		—		39		—		39

Real estate – commercial
Risk Grades 1 - 4		4,747		34,698		245,563		118,435		142,211		133,856		21,323		700,833
Risk Grades 5 - 6		535		5,092		64,677		7,002		14,604		23,104		4,184		119,198
Risk Grade 7		1,565		—		9,970		10,380		2,945		1,355		25		26,240
Risk Grade 8		—		—		—		1,379		—		192		—		1,571
Total		6,847		39,790		320,210		137,196		159,760		158,507		25,532		847,842
Current period gross charge-offs		—		—		1,106		—		72		60		—		1,238

Real estate – residential
Risk Grades 1 - 4		2,815		66,780		225,159		114,682		64,548		143,002		53,498		670,484
Risk Grades 5 - 6		853		—		2,303		1,295		318		2,378		95		7,242
Risk Grade 7		—		736		2,153		2,113		1,454		5,822		2,249		14,527
Total		3,668		67,516		229,615		118,090		66,320		151,202		55,842		692,253
Current period gross charge-offs		—		—		—		111		—		103		2		216

Real estate – farmland
Risk Grades 1 - 4		147		—		997		1,239		—		2,753		149		5,285
Risk Grades 5 - 6		—		135		—		100		—		—		—		235
Total		147		135		997		1,339		—		2,753		149		5,520
Current period gross charge-offs		—		—		—		—		—		—		—		—

Consumer
Risk Grades 1 - 4		5,944		17,211		8,716		1,650		1,034		486		7,283		42,324
Risk Grades 5 - 6		74		133		225		99		32		3		—		566
Risk Grade 7		87		330		332		184		63		24		28		1,048
Total		6,105		17,674		9,273		1,933		1,129		513		7,311		43,938
Current period gross charge-offs		720		672		1,374		91		37		45		—		2,939

Total Loans
Risk Grades 1 - 4	$	53,329	$	147,386	$	618,362	$	272,353	$	230,603	$	300,706	$	182,509	$	1,805,248
Risk Grades 5 - 6		2,327		30,880		104,708		26,264		24,907		30,699		19,371		239,156
Risk Grade 7		2,596		3,599		17,783		23,163		5,024		8,709		3,823		64,697
Risk Grade 8		—		—		—		1,461		—		193		—		1,654
Total	$	58,252	$	181,865	$	740,853	$	323,241	$	260,534	$	340,307	$	205,703	$	2,110,755
Total current period gross charge-offs	$	793	$	1,147	$	21,488	$	2,869	$	1,124	$	418	$	598	$	28,437

The following table presents the recorded investment of loans held for investment by internal loan risk grade by year of origination as of December 31, 2023. There were no loans classified as loss (risk grade 9) as of the same date.


	Term Loans Recorded Investment Basis by Origination Year
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
Commercial and industrial
Risk Grades 1 - 4	$	15,830	$	114,291	$	32,273	$	25,429	$	8,217	$	14,200	$	138,267	$	348,507
Risk Grades 5 - 6		26,563		40,399		12,759		6,305		819		1,537		19,722		108,104
Risk Grade 7		—		877		3,623		829		543		134		9,191		15,197
Risk Grade 8		—		34,203		2,554		—		—		379		—		37,136
Total		42,393		189,770		51,209		32,563		9,579		16,250		167,180		508,944

Real estate – construction, commercial
Risk Grades 1 - 4		8,533		85,687		33,344		14,690		6,358		5,589		4,367		158,568
Risk Grades 5 - 6		4,213		11,072		760		293		—		738		3,827		20,903
Risk Grade 7		119		46		40		—		—		376		—		581
Total		12,865		96,805		34,144		14,983		6,358		6,703		8,194		180,052

Real estate – construction, residential
Risk Grades 1 - 4		31,611		22,734		3,867		59		741		67		10,656		69,735
Risk Grades 5 - 6		1,486		2,672		—		167		200		—		—		4,525
Risk Grade 7		367		1,205		—		—		—		—		—		1,572
Total		33,464		26,611		3,867		226		941		67		10,656		75,832

Real estate – commercial
Risk Grades 1 - 4		14,671		280,479		121,257		144,498		42,226		123,774		20,332		747,237
Risk Grades 5 - 6		2,841		25,075		9,038		19,597		12,921		27,778		4,214		101,464
Risk Grade 7		323		—		8,202		4,938		111		8,265		—		21,839
Total		17,835		305,554		138,497		169,033		55,258		159,817		24,546		870,540

Real estate – residential
Risk Grades 1 - 4		51,042		218,375		121,872		69,165		27,877		132,986		55,327		676,644
Risk Grades 5 - 6		12,014		9,339		677		1,944		2,122		7,281		3,255		36,632
Risk Grade 7		—		2,240		2,446		1,812		943		9,307		85		16,833
Risk Grade 8		—		—		—		—		—		1		—		1
Total		63,056		229,954		124,995		72,921		30,942		149,575		58,667		730,110

Real estate – farmland
Risk Grades 1 - 4		—		729		1,397		—		1,520		1,562		115		5,323
Risk Grades 5 - 6		147		—		—		—		—		—		—		147
Total		147		729		1,397		—		1,520		1,562		115		5,470

Consumer
Risk Grades 1 - 4		26,535		14,215		3,598		2,724		1,137		466		8,766		57,441
Risk Grades 5 - 6		61		42		12		12		8		433		495		1,063
Risk Grade 7		14		259		115		131		44		102		—		665
Total		26,610		14,516		3,725		2,867		1,189		1,001		9,261		59,169

Total Loans
Risk Grades 1 - 4	$	148,222	$	736,510	$	317,608	$	256,565	$	88,076	$	278,644	$	237,830	$	2,063,455
Risk Grades 5 - 6		47,325		88,599		23,246		28,318		16,070		37,767		31,513		272,838
Risk Grade 7		823		4,627		14,426		7,710		1,641		18,184		9,276		56,687
Risk Grade 8		—		34,203		2,554		—		—		380		—		37,137
Total	$	196,370	$	863,939	$	357,834	$	292,593	$	105,787	$	334,975	$	278,619	$	2,430,117

Of the $37.1 million of commercial and industrial loans classified as doubtful (risk grade 8) as of December 31, 2023, $34.2 million were attributable to a group of specialty finance loans with a collective specific reserve, a component of the ACL, of $9.6 million as of the same date. The entirety of the group of specialty finance loans were paid off and/or charged off in the year ended December 31, 2024.

The following table presents an analysis of the change in the ACL by loan segment for the periods stated.


	For the year ended December 31, 2024
(Dollars in thousands)	Commercial and industrial			Real estate – construction, commercial			Real estate – construction, residential			Real estate – commercial			Real estate – residential			Real estate – farmland		Consumer			Total
ACL, beginning of period	$	13,787		$	4,024		$	1,094		$	9,929		$	6,286		$	15	$	758		$	35,893
(Recovery of) provision for credit losses - loans		(1,363	)		(1,982	)		(515	)		(2,798	)		1,734			3		2,021			(2,900	)
Charge-offs		(24,005	)		—			(39	)		(1,238	)		(216	)		—		(2,939	)		(28,437	)
Recoveries		17,348			15			—			70			129			—		905			18,467
Net (charge-offs) recoveries		(6,657	)		15			(39	)		(1,168	)		(87	)		—		(2,034	)		(9,970	)
ACL, end of period	$	5,767		$	2,057		$	540		$	5,963		$	7,933		$	18	$	745		$	23,023

	For the year ended December 31, 2023
(Dollars in thousands)	Commercial and industrial			Real estate – construction, commercial			Real estate – construction, residential			Real estate – commercial			Real estate – residential			Real estate – farmland		Consumer			Total
ACL, beginning of period	$	23,073		$	1,637		$	628		$	2,356		$	1,760		$	4	$	1,282		$	30,740
Impact of ASC 326 Adoption		(4,424	)		2,356			779			5,870			2,840			10		(13	)		7,418
Provision for (recovery of) credit losses - loans		19,300			21			(445	)		1,440			3,139			1		1,247			24,703
Charge-offs		(27,837	)		(36	)		—			—			(1,631	)		—		(2,315	)		(31,819	)
Recoveries		3,675			46			132			263			178			—		557			4,851
Net (charge-offs) recoveries		(24,162	)		10			132			263			(1,453	)		—		(1,758	)		(26,968	)
ACL, end of period	$	13,787		$	4,024		$	1,094		$	9,929		$	6,286		$	15	$	758		$	35,893

In the fourth quarter of 2024, the Company, with the support of its third-party CECL model provider, updated its quantitative loss models for collectively evaluated loans that use the DCF method. This update was part of the Company’s ongoing commitment to maintaining robust model oversight and ensuring compliance with regulatory expectations. Key changes included refreshing the Bank’s peer group, incorporating additional historical loss data following the COVID-19 pandemic, and updating assumptions related to prepayment and curtailment rates. Furthermore, loans in nonaccrual status within collectively evaluated segments are now treated as immediate defaults in the DCF calculations. There were no changes to the Company’s use of reasonable and supportable forecast periods or factors. The Company also enhanced its qualitative factor framework to better address risks that are not reflected in the quantitative loss factors.

Excluded from the ACL as of December 31, 2024 and 2023 were $10.7 million and $13.2 million of accrued interest attributable to loans held for investment, respectively, which is included in accrued interest receivable on the consolidated balance sheet.

The following table presents the amortized cost of collateral-dependent loans as of the dates stated.


(Dollars in thousands)	December 31, 2024		December 31, 2023
Commercial and industrial	$	42,723	$	67,555
Real estate – construction, commercial		116		6,309
Real estate – construction, residential		—		2,303
Real estate – commercial		26,994		13,401
Real estate – residential		9,586		7,337
Total collateral-dependent loans	$	79,419	$	96,905

Acquired Loans

As of December 31, 2024 and 2023, the amortized cost of PCD loans totaled $43.8 million and $51.0 million, respectively, with an estimated ACL of $262 thousand and $529 thousand, respectively. The remaining non-credit discount on PCD loans was $3.0 million and $3.8 million as of December 31, 2024 and 2023, respectively.

Troubled Loan Modifications

The Company closely monitors the performance of borrowers experiencing financial difficulty and grants certain loan modifications it would otherwise not consider. The Company refers to such loan modifications as troubled loan modifications.

The following table presents the amortized cost of TLMs, categorized by loan type and type of concession granted, for the periods stated.


	For the twelve months ended December 31,
	2024					2023
(Dollars in thousands)	Recorded Investment		% of Recorded Investment to Gross Loans by Category			Recorded Investment			% of Recorded Investment to Gross Loans by Category
Term extension and forbearance
Commercial and industrial	$	330		0.09	%	$	36,930	(1)		7.29	%
Real estate – construction, residential		—		—			155			0.20	%
Real estate – commercial		1,773		0.21	%		6,087			0.70	%
Real estate – residential		71		0.01	%		129			0.02	%
Total term extension and forbearance	$	2,174				$	43,301
Payment deferral 3-9 months
Commercial and industrial	$	836		0.24	%	$	182			0.04	%
Real estate – residential		500		0.07	%		577			0.08	%
Consumer loans		10		0.02	%		—			—
Total payment deferral	$	1,346				$	759
Total	$	3,520				$	44,060

(1) A $32.8 million specialty finance loan was modified via a forbearance agreement in the second quarter of 2023 under which the borrower defaulted in the same period. This loan was sold in the second quarter of 2024.

The following tables present an aging analysis of the amortized cost of TLMs as of the dates stated.


	December 31, 2024
(Dollars in thousands)	Current Loans		30-89 Days Past Due		Greater than 90 Days Past Due & Accruing		Nonaccrual		Total
Commercial and industrial	$	554	$	—	$	—	$	2,745	$	3,299
Real estate – construction, residential		155		—		—		—		155
Real estate – commercial		1,773		—		—		2,999		4,772
Real estate – residential		194		—		—		500		694
Consumer loans		—		—		—		10		10
Total modified loans	$	2,676	$	—	$	—	$	6,254	$	8,930


	December 31, 2023
(Dollars in thousands)	Current Loans		30-89 Days Past Due		Greater than 90 Days Past Due & Accruing		Nonaccrual		Total
Commercial and industrial	$	1,626	$	—	$	—	$	35,486	$	37,112
Real estate – construction, residential		155		—		—		—		155
Real estate – commercial		—		—		—		6,087		6,087
Real estate – residential		129		—		—		577		706
Total modified loans	$	1,910	$	—	$	—	$	42,150	$	44,060

As of December 31, 2024 and 2023, there were no unfunded commitments to borrowers of loans modified and designated as TLMs.

The following table presents the amortized cost of TLMs that were modified in the preceding twelve months and had a payment default during the periods stated.


	For the twelve months ended December 31,
	2024					2023
(Dollars in thousands)	Amortized Cost		% of Amortized Cost to Gross Loans by Category			Amortized Cost		% of Amortized Cost to Gross Loans by Category
Term extension and forbearance
Commercial and industrial	$	330		0.09	%	$	32,750		6.43	%
Real estate – residential		71		0.01	%		—		—
Total term extension and forbearance	$	401				$	32,750
Payment deferral 6-9 months
Commercial and industrial	$	347		0.10	%	$	183		0.04	%
Real estate – residential		—		—			577		0.08	%
Total payment deferral	$	347				$	760
Total	$	748				$	33,510

Four residential mortgage loans with a total recorded investment of $169 thousand were in the process of foreclosure as of December 31, 2024, and four residential mortgage loans with a total recorded investment of $134 thousand were in the process of foreclosure as of December 31, 2023.