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Loans and ACL | 3 Months Ended
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Mar. 31, 2025
Receivables [Abstract] |
Loans and ACL | Note 3 – Loan s and ACL The following table presents the amortized cost of loans held for investment as of the dates stated.
(Dollars in thousands) |  | March 31, 2025 |  |  | December 31, 2024 |
Commercial and industrial |  | $ | 340,099 |  |  | $ | 354,904 |
Real estate – construction, commercial |  |  | 103,006 |  |  |  | 114,491 |
Real estate – construction, residential |  |  | 53,498 |  |  |  | 51,807 |
Real estate – commercial |  |  | 834,223 |  |  |  | 847,842 |
Real estate – residential |  |  | 683,946 |  |  |  | 692,253 |
Real estate – farmland |  |  | 4,748 |  |  |  | 5,520 |
Consumer |  |  | 39,761 |  |  |  | 43,938 |
Gross loans held for investment |  |  | 2,059,281 |  |  |  | 2,110,755 |
Deferred costs, net of loan fees |  |  | 429 |  |  |  | 1,042 |
Total |  | $ | 2,059,710 |  |  | $ | 2,111,797 |
The Company has pledged certain commercial and residential mortgage loans as collateral for borrowings with the FHLB. Loans totaling $772.4 million and $797.7 million were pledged with the FHLB as of March 31, 2025 and December 31, 2024, respectively. Additionally, t he Company has pledged certain construction, and commercial and industrial loans totaling $68.5 million and $91.6 million as of March 31, 2025 and December 31, 2024, respectively, as collateral for borrowings with the FRB Discount Window. The following tables present the aging of the recorded investment of loans held for investment by loan category as of the dates stated.
|  | March 31, 2025 |
(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 |  | $ | 325,702 |  |  | $ | 1,456 |  |  | $ | 874 |  |  | $ | 2,316 |  |  | $ | 9,751 |  |  | $ | 340,099 |
Real estate – construction, commercial |  |  | 102,788 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 218 |  |  |  | 103,006 |
Real estate – construction, residential |  |  | 53,498 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 53,498 |
Real estate – commercial |  |  | 826,279 |  |  |  | 3,651 |  |  |  | 119 |  |  |  | — |  |  |  | 4,174 |  |  |  | 834,223 |
Real estate – residential |  |  | 664,685 |  |  |  | 11,252 |  |  |  | 519 |  |  |  | 70 |  |  |  | 7,420 |  |  |  | 683,946 |
Real estate – farmland |  |  | 4,748 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,748 |
Consumer |  |  | 37,748 |  |  |  | 889 |  |  |  | 192 |  |  |  | 222 |  |  |  | 710 |  |  |  | 39,761 |
Deferred costs, net of loan fees |  |  | 429 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 429 |
Total |  | $ | 2,015,877 |  |  | $ | 17,248 |  |  | $ | 1,704 |  |  | $ | 2,608 |  |  | $ | 22,273 |  |  | $ | 2,059,710 |
|  | 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 |
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.
|  | March 31, 2025 |
(Dollars in thousands) |  | Nonaccrual Loans with No ACL |  |  | Nonaccrual Loans with an ACL |  |  | Total Nonaccrual Loans |
Commercial and industrial |  | $ | — |  |  | $ | 9,751 |  |  | $ | 9,751 |
Real estate – construction, commercial |  |  | — |  |  |  | 218 |  |  |  | 218 |
Real estate – commercial |  |  | — |  |  |  | 4,174 |  |  |  | 4,174 |
Real estate – residential |  |  | 1,052 |  |  |  | 6,368 |  |  |  | 7,420 |
Consumer |  |  | — |  |  |  | 710 |  |  |  | 710 |
Total |  | $ | 1,052 |  |  | $ | 21,221 |  |  | $ | 22,273 |
|  | 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 |
The Company recognized $118 thousand and $65 thousand of interest income on nonaccrual loans during the three months ended March 31, 2025 and 2024, respectively. 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 three months ended March 31, |
(Dollars in thousands) |  | 2025 |  |  | 2024 |
Commercial and industrial |  | $ | 70 |  |  | $ | 57 |
Real estate – construction, commercial |  |  | — |  |  |  | 25 |
Real estate – commercial |  |  | 4 |  |  |  | 51 |
Real estate – residential |  |  | 36 |  |  |  | 10 |
Consumer |  |  | 7 |  |  |  | 5 |
Total |  | $ | 117 |  |  | $ | 148 |
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, and 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 March 31, 2025. There were no loans classified as loss (risk grade 9) as of the same date. Also presented are current period gross charge-offs by loan type for the three months ended March 31, 2025.
|  | Term Loans Recorded Investment Basis by Origination Year |  |  |  |  |  |  |
(Dollars in thousands) |  | 2025 |  |  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | Prior |  |  | Revolving Loans |  |  | Total |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Grades 1 - 4 |  | $ | 5,226 |  |  | $ | 10,508 |  |  | $ | 13,830 |  |  | $ | 52,822 |  |  | $ | 12,525 |  |  | $ | 28,927 |  |  | $ | 103,283 |  |  | $ | 227,121 |
Risk Grades 5 - 6 |  |  | — |  |  |  | 397 |  |  |  | 23,880 |  |  |  | 38,796 |  |  |  | 6,939 |  |  |  | 6,209 |  |  |  | 11,460 |  |  |  | 87,681 |
Risk Grade 7 |  |  | — |  |  |  | 861 |  |  |  | 342 |  |  |  | 5,421 |  |  |  | 13,053 |  |  |  | 1,811 |  |  |  | 1,804 |  |  |  | 23,292 |
Risk Grade 8 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,005 |  |  |  | — |  |  |  | — |  |  |  | 2,005 |
Total |  |  | 5,226 |  |  |  | 11,766 |  |  |  | 38,052 |  |  |  | 97,039 |  |  |  | 34,522 |  |  |  | 36,947 |  |  |  | 116,547 |  |  |  | 340,099 |
Current period gross charge-offs |  |  | — |  |  |  | 23 |  |  |  | 30 |  |  |  | 1,937 |  |  |  | — |  |  |  | 83 |  |  |  | 50 |  |  |  | 2,123 |
Real estate – construction, commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Grades 1 - 4 |  |  | 180 |  |  |  | 6,341 |  |  |  | 3,694 |  |  |  | 46,453 |  |  |  | 6,593 |  |  |  | 9,641 |  |  |  | 399 |  |  |  | 73,301 |
Risk Grades 5 - 6 |  |  | — |  |  |  | — |  |  |  | 1,086 |  |  |  | 18,000 |  |  |  | 714 |  |  |  | 9,584 |  |  |  | — |  |  |  | 29,384 |
Risk Grade 7 |  |  | — |  |  |  | — |  |  |  | 115 |  |  |  | — |  |  |  | 19 |  |  |  | 187 |  |  |  | — |  |  |  | 321 |
Total |  |  | 180 |  |  |  | 6,341 |  |  |  | 4,895 |  |  |  | 64,453 |  |  |  | 7,326 |  |  |  | 19,412 |  |  |  | 399 |  |  |  | 103,006 |
Current period gross charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – construction, residential |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Grades 1 - 4 |  |  | 4,919 |  |  |  | 17,829 |  |  |  | 7,558 |  |  |  | 3,352 |  |  |  | — |  |  |  | 55 |  |  |  | 739 |  |  |  | 34,452 |
Risk Grades 5 - 6 |  |  | 86 |  |  |  | — |  |  |  | 215 |  |  |  | — |  |  |  | 18,278 |  |  |  | — |  |  |  | — |  |  |  | 18,579 |
Risk Grade 7 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 467 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 467 |
Total |  |  | 5,005 |  |  |  | 17,829 |  |  |  | 7,773 |  |  |  | 3,819 |  |  |  | 18,278 |  |  |  | 55 |  |  |  | 739 |  |  |  | 53,498 |
Current period gross charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Grades 1 - 4 |  |  | 5,924 |  |  |  | 4,663 |  |  |  | 37,221 |  |  |  | 217,275 |  |  |  | 114,002 |  |  |  | 259,122 |  |  |  | 19,007 |  |  |  | 657,214 |
Risk Grades 5 - 6 |  |  | — |  |  |  | 532 |  |  |  | 3,393 |  |  |  | 87,068 |  |  |  | 10,375 |  |  |  | 47,782 |  |  |  | 4,383 |  |  |  | 153,533 |
Risk Grade 7 |  |  | — |  |  |  | 1,560 |  |  |  | — |  |  |  | 10,192 |  |  |  | 8,190 |  |  |  | 2,170 |  |  |  | 25 |  |  |  | 22,137 |
Risk Grade 8 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,339 |  |  |  | — |  |  |  | — |  |  |  | 1,339 |
Total |  |  | 5,924 |  |  |  | 6,755 |  |  |  | 40,614 |  |  |  | 314,535 |  |  |  | 133,906 |  |  |  | 309,074 |  |  |  | 23,415 |  |  |  | 834,223 |
Current period gross charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 63 |  |  |  | — |  |  |  | 63 |
Real estate – residential |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Grades 1 - 4 |  |  | 1,016 |  |  |  | 2,199 |  |  |  | 65,597 |  |  |  | 225,464 |  |  |  | 112,936 |  |  |  | 198,552 |  |  |  | 56,971 |  |  |  | 662,735 |
Risk Grades 5 - 6 |  |  | — |  |  |  | 909 |  |  |  | — |  |  |  | 998 |  |  |  | 2,182 |  |  |  | 4,692 |  |  |  | 98 |  |  |  | 8,879 |
Risk Grade 7 |  |  | 141 |  |  |  | — |  |  |  | 1,104 |  |  |  | 2,165 |  |  |  | 1,723 |  |  |  | 6,702 |  |  |  | 497 |  |  |  | 12,332 |
Total |  |  | 1,157 |  |  |  | 3,108 |  |  |  | 66,701 |  |  |  | 228,627 |  |  |  | 116,841 |  |  |  | 209,946 |  |  |  | 57,566 |  |  |  | 683,946 |
Current period gross charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 16 |  |  |  | — |  |  |  | 16 |
Real estate – farmland |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Grades 1 - 4 |  |  | — |  |  |  | 146 |  |  |  | — |  |  |  | 995 |  |  |  | 1,225 |  |  |  | 2,005 |  |  |  | 148 |  |  |  | 4,519 |
Risk Grades 5 - 6 |  |  | — |  |  |  | — |  |  |  | 132 |  |  |  | — |  |  |  | 97 |  |  |  | — |  |  |  | — |  |  |  | 229 |
Total |  |  | — |  |  |  | 146 |  |  |  | 132 |  |  |  | 995 |  |  |  | 1,322 |  |  |  | 2,005 |  |  |  | 148 |  |  |  | 4,748 |
Current period gross charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Grades 1 - 4 |  |  | 965 |  |  |  | 5,063 |  |  |  | 15,346 |  |  |  | 7,683 |  |  |  | 1,314 |  |  |  | 1,102 |  |  |  | 6,680 |  |  |  | 38,153 |
Risk Grades 5 - 6 |  |  | — |  |  |  | 101 |  |  |  | 173 |  |  |  | 294 |  |  |  | 76 |  |  |  | 29 |  |  |  | — |  |  |  | 673 |
Risk Grade 7 |  |  | — |  |  |  | 56 |  |  |  | 256 |  |  |  | 361 |  |  |  | 180 |  |  |  | 75 |  |  |  | — |  |  |  | 928 |
Risk Grade 8 |  |  | — |  |  |  | — |  |  |  | 7 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7 |
Total |  |  | 965 |  |  |  | 5,220 |  |  |  | 15,782 |  |  |  | 8,338 |  |  |  | 1,570 |  |  |  | 1,206 |  |  |  | 6,680 |  |  |  | 39,761 |
Current period gross charge-offs |  |  | — |  |  |  | 302 |  |  |  | 55 |  |  |  | 220 |  |  |  | 6 |  |  |  | 4 |  |  |  | — |  |  |  | 587 |
Total Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Grades 1 - 4 |  | $ | 18,230 |  |  | $ | 46,749 |  |  | $ | 143,246 |  |  | $ | 554,044 |  |  | $ | 248,595 |  |  | $ | 499,404 |  |  | $ | 187,227 |  |  | $ | 1,697,495 |
Risk Grades 5 - 6 |  |  | 86 |  |  |  | 1,939 |  |  |  | 28,879 |  |  |  | 145,156 |  |  |  | 38,661 |  |  |  | 68,296 |  |  |  | 15,941 |  |  |  | 298,958 |
Risk Grade 7 |  |  | 141 |  |  |  | 2,477 |  |  |  | 1,817 |  |  |  | 18,606 |  |  |  | 23,165 |  |  |  | 10,945 |  |  |  | 2,326 |  |  |  | 59,477 |
Risk Grade 8 |  |  | — |  |  |  | — |  |  |  | 7 |  |  |  | — |  |  |  | 3,344 |  |  |  | — |  |  |  | — |  |  |  | 3,351 |
Total |  | $ | 18,457 |  |  | $ | 51,165 |  |  | $ | 173,949 |  |  | $ | 717,806 |  |  | $ | 313,765 |  |  | $ | 578,645 |  |  | $ | 205,494 |  |  | $ | 2,059,281 |
Total current period gross charge-offs |  | $ | — |  |  | $ | 325 |  |  | $ | 85 |  |  | $ | 2,157 |  |  | $ | 6 |  |  | $ | 166 |  |  | $ | 50 |  |  | $ | 2,789 |
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.
|  | 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 |
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 |
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 |
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 |
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 |
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 |
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 |
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 |
The following tables present an analysis of the change in the ACL by loan segment for the periods stated.
|  | For the three months ended March 31, 2025 |
(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 |  | $ | 5,767 |  |  | $ | 2,057 |  |  | $ | 540 |  |  | $ | 5,963 |  |  | $ | 7,933 |  |  | $ | 18 |  |  | $ | 745 |  |  | $ | 23,023 |
(Recovery of) provision for credit losses - loans |  |  | (189 | ) |  |  | (65 | ) |  |  | 12 |  |  |  | (240 | ) |  |  | 253 |  |  |  | — |  |  |  | 229 |  |  |  | — |
Charge-offs |  |  | (2,123 | ) |  |  | — |  |  |  | — |  |  |  | (63 | ) |  |  | (16 | ) |  |  | — |  |  |  | (587 | ) |  |  | (2,789 | )
Recoveries |  |  | 2,271 |  |  |  | — |  |  |  | — |  |  |  | 338 |  |  |  | 1 |  |  |  | — |  |  |  | 282 |  |  |  | 2,892 |
Net recoveries (charge-offs) |  |  | 148 |  |  |  | — |  |  |  | — |  |  |  | 275 |  |  |  | (15 | ) |  |  | — |  |  |  | (305 | ) |  |  | 103 |
ACL, end of period |  | $ | 5,726 |  |  | $ | 1,992 |  |  | $ | 552 |  |  | $ | 5,998 |  |  | $ | 8,171 |  |  | $ | 18 |  |  | $ | 669 |  |  | $ | 23,126 |
|  | For the three months ended March 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 |
Provision for (recovery of) credit losses - loans |  |  | 257 |  |  |  | (428 | ) |  |  | (175 | ) |  |  | (97 | ) |  |  | 39 |  |  |  | 3 |  |  |  | 401 |  |  |  | — |
Charge-offs |  |  | (1,957 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (745 | ) |  |  | (2,702 | )
Recoveries |  |  | 1,532 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 13 |  |  |  | — |  |  |  | 289 |  |  |  | 1,834 |
Net (charge-offs) recoveries |  |  | (425 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 13 |  |  |  | — |  |  |  | (456 | ) |  |  | (868 | )
ACL, end of period |  | $ | 13,619 |  |  | $ | 3,596 |  |  | $ | 919 |  |  | $ | 9,832 |  |  | $ | 6,338 |  |  | $ | 18 |  |  | $ | 703 |  |  | $ | 35,025 |
There were no material changes to the assumptions, loss factors (both quantitative and qualitative), or reasonable and supportable forecasts used in the estimation of the ACL and the provision for (recovery of) credit losses for loans held for investment as of and for the three months ended March 31, 2025. Excluded from the ACL as of both March 31, 2025 and December 31, 2024 was $10.7 million of accrued interest attributable to loans held for investment, which is included in accrued interest receivable on the consolidated balance sheet. The following table presents the amortized cost of collateral-dependent loans that are individually evaluated for credit losses as of the dates stated.
(Dollars in thousands) |  | March 31, 2025 |  |  | December 31, 2024 |
Commercial and industrial |  | $ | 22,560 |  |  | $ | 42,723 |
Real estate – construction, commercial |  |  | 115 |  |  |  | 116 |
Real estate – commercial |  |  | 25,250 |  |  |  | 26,994 |
Real estate – residential |  |  | 6,301 |  |  |  | 9,586 |
Total collateral-dependent loans |  | $ | 54,226 |  |  | $ | 79,419 |
Acquired Loans As of March 31, 2025 and December 31, 2024, the amortized cost of purchased credit deteriorated ("PCD") loans totaled $39.5 million and $43.8 million, respectively, with an estimated ACL of $255 thousand and $262 thousand, respectively. The remaining non-credit discount on PCD loans was $2.8 million and $3.0 million as of March 31, 2025 and December 31, 2024, 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 ("TLMs"). The following table presents the amortized cost of TLMs, categorized by loan type and type of concession granted, for the periods stated.
|  | For the three months ended March 31, |
|  | 2025 |  |  | 2024 |
(Dollars in thousands) |  | Number of Loans |  |  | Recorded Investment |  |  | % of Recorded Investment to Gross Loans by Category |  |  | Number of Loans |  |  | Recorded Investment |  |  | % of Recorded Investment to Gross Loans by Category |
Combined - term extension and deferral |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 1 |  |  | $ | 2,024 |  |  |  | 0.60 | % |  |  | — |  |  | $ | — |  |  |  | 0.00 | %
Total combined - term extension and deferral |  |  | 1 |  |  | $ | 2,024 |  |  |  |  |  |  | — |  |  | $ | — |  |  |  |
Interest forgiveness |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate – residential |  |  | 1 |  |  | $ | 141 |  |  |  | 0.02 | % |  |  | — |  |  | $ | — |  |  |  | 0.00 | %
Total interest forgiveness |  |  | 1 |  |  | $ | 141 |  |  |  |  |  |  | — |  |  | $ | — |  |  |  |
Total |  |  | 2 |  |  | $ | 2,165 |  |  |  |  |  |  | — |  |  | $ | — |  |  |  |
For the three months ended March 31, 2025, the borrower of a commercial and industrial loan, which has been on nonaccrual status since the second quarter of 2024, was granted an 18-month term extension and principal deferral, extending the loan's maturity to a total of 72 months. Interest-only payments are due through the extended term, with a principal balloon payment due at the revised maturity date of June 2027. Also in the first quarter of 2025, three loans partially charged off in 2024 to a single borrower were refinanced into a single residential mortgage loan, which included the forgiveness of $40 thousand of accrued interest. The following tables present an aging analysis of the amortized cost of TLMs as of the dates stated.
|  | March 31, 2025 |
(Dollars in thousands) |  | Current Loans |  |  | 30-89 Days Past Due |  |  | Greater than 90 Days Past Due & Accruing |  |  | Nonaccrual |  |  | Total |
Commercial and industrial |  | $ | 734 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,513 |  |  | $ | 5,247 |
Real estate – construction, residential |  |  | 154 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 154 |
Real estate – commercial |  |  | 1,764 |  |  |  | — |  |  |  | — |  |  |  | 2,997 |  |  |  | 4,761 |
Real estate – residential |  |  | 192 |  |  |  | 141 |  |  |  | — |  |  |  | 493 |  |  |  | 826 |
Consumer loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9 |  |  |  | 9 |
Total modified loans |  | $ | 2,844 |  |  | $ | 141 |  |  | $ | — |  |  | $ | 8,012 |  |  | $ | 10,997 |
|  | 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 |
As of March 31, 2025 and December 31, 2024, there were no unfunded commitments to borrowers with 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 three months ended March 31, |
|  | 2025 |  |  | 2024 |
(Dollars in thousands) |  | Number of Loans |  |  | Amortized Cost |  |  | % of Amortized Cost to Gross Loans by Category |  |  | Number of Loans |  |  | Amortized Cost |  |  | % of Amortized Cost to Gross Loans by Category |
Combined - term extension and deferral |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | — |  |  | $ | — |  |  |  | 0.00 | % |  | 1 |  |  | $ | 2,548 |  |  |  | 0.52 | %
Total combined - term extension and deferral |  |  | — |  |  | $ | — |  |  |  |  |  | 1 |  |  | $ | 2,548 |  |  |  |
Interest forgiveness |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate – residential |  | 1 |  |  | $ | 141 |  |  |  | 0.02 | % |  |  | — |  |  | $ | — |  |  |  | 0.00 | %
Total interest forgiveness |  | 1 |  |  | $ | 141 |  |  |  |  |  |  | — |  |  | $ | — |  |  |  |
Payment deferral 6-9 months |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate – residential |  | 1 |  |  | $ | 493 |  |  |  | 0.07 | % |  | 1 |  |  | $ | 565 |  |  |  | 0.08 | %
Consumer |  | 1 |  |  |  | 9 |  |  |  | 0.02 | % |  |  | — |  |  |  | — |  |  |  | 0.00 | %
Total payment deferral |  | 2 |  |  | $ | 502 |  |  |  |  |  | 1 |  |  | $ | 565 |  |  |  |
Total |  | 3 |  |  | $ | 643 |  |  |  |  |  | 2 |  |  | $ | 3,113 |  |  |  |
As of March 31, 2025, five residential mortgage loans with a total amortized cost of $755 thousand were in the process of foreclosure.

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