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Loans and Allowance for Loan Losses | 12 Months Ended
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Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] |
Loans and Allowance for Loan Losses | NOTE 4 – Loans and Allowance for Loan Losses The Company makes loans to individuals and small businesses for various personal and commercial purposes primarily in the Upstate, Midlands, and Lowcountry regions of South Carolina, the Triangle and Triad regions of North Carolina as well as Atlanta, Georgia. The Company’s loan portfolio is not concentrated in loans to any single borrower or a relatively small number of borrowers. The Company focuses its lending activities primarily on the professional markets in these regions including doctors, dentists, and small business owners. The principal component of the loan portfolio is loans secured by real estate mortgages which account for 85.5% of total loans at December 31, 2021. Commercial loans comprise 57.3% of total real estate loans and consumer loans account for 42.7%. Commercial real estate loans are further categorized into owner occupied which represents 19.6% of total loans and non-owner occupied loans represent 26.8%. Commercial construction loans represent only 2.6% of the total loan portfolio. In addition to monitoring potential concentrations of loans to particular borrowers or groups of borrowers, industries and geographic regions, management monitors exposure to credit risk from concentrations of lending products and practices such as loans that subject borrowers to substantial payment increases (e.g. principal deferral periods, loans with initial interest-only periods, etc.), and loans with high loan-to-value ratios. Additionally, there are industry practices that could subject the Company to increased credit risk should economic conditions change over the course of a loan’s life. For example, the Company makes variable rate loans and fixed rate principal-amortizing loans with maturities prior to the loan being fully paid (i.e. balloon payment loans). The various types of loans are individually underwritten and monitored to manage the associated risks. The allowance for loan losses is management's estimate of credit losses inherent in the loan portfolio at the balance sheet date. We have an established process to determine the adequacy of the allowance for loan losses that assesses the losses inherent in our portfolio. While we attribute portions of the allowance to specific portfolio segments, the entire allowance is available to absorb credit losses inherent in the total loan portfolio. Our process involves procedures to appropriately consider the unique risk characteristics of our commercial and consumer loan portfolio segments. For each portfolio segment, impairment is measured individually for each impaired loan. Our allowance levels are influenced by loan volume, loan grade or delinquency status, historic loss experience and other economic conditions. Paycheck Protection Program (“PPP”) On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES” Act or the “Act”) to provide emergency assistance and health care response for individuals, families, and businesses affected by the coronavirus pandemic. The Small Business Administration (“SBA”) received funding and authority through the Act to modify existing loan programs and establish a new loan program to assist small businesses nationwide adversely impacted by the COVID-19 emergency. The Act temporarily permits the SBA to guarantee 100% of certain loans under a new program titled the “Paycheck Protection Program” and also provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the PPP. In an effort to assist our clients as best we could through the pandemic, we became an approved SBA lender in March 2020 and processed 853 loans under the PPP for a total of $97.5 million, receiving SBA lender fee income of $3.9 million. As the regulations and guidance for PPP loans and the forgiveness process continued to change and evolve, management recognized the operational risk and complexity associated with this portfolio and decided to pursue the sale of the PPP loan portfolio to a third party better suited to support and serve our PPP clients through the loan forgiveness process. The loan sale allowed our team to focus on serving our clients and proactively monitoring and addressing credit risk brought on by the pandemic. On June 26, 2020, we completed the sale of our PPP loan portfolio to The Loan Source Inc., together with its servicing partner, ACAP SME LLC, and immediately recognized SBA lender fee income of $2.2 million, net of sale and processing costs, which is included in other noninterest income in the consolidated financial statements. The SBA offered a second round of PPP loans through May 31, 2021; however, we did not originate any new PPP loans. We did, however, receive referral fees of approximately $268,000 during the three months ended June 30, 2021 from The Loan Source Inc. for PPP loans they originated to our clients. Portfolio Segment Methodology Commercial Commercial loans are assessed for estimated losses by grading each loan using various risk factors identified through periodic reviews. The Company applies historic grade-specific loss factors to each loan class. In the development of statistically derived loan grade loss factors, the Company observes historical losses over 20 quarters for each loan grade. These loss estimates are adjusted as appropriate based on additional analysis of external loss data or other risks identified from current economic conditions and credit quality trends. The allowance also includes an amount for the estimated impairment on nonaccrual commercial loans and commercial loans modified in a TDR, whether on accrual or nonaccrual status. Consumer For consumer loans, the Company determines the allowance on a collective basis utilizing historical losses over 20 quarters to represent its best estimate of inherent loss. The Company pools loans, generally by loan class with similar risk characteristics. The allowance also includes an amount for the estimated impairment on nonaccrual consumer loans and consumer loans modified in a TDR, whether on accrual or nonaccrual status. 84 Table of Contents The following table summarizes the composition of our loan portfolio. Total gross loans are recorded net of deferred loan fees and costs, which totaled $5.0 million and $3.9 million as of December 31, 2021 and December 31, 2020, respectively.
|  | December 31,
(dollars in thousands) |  | 2021 |  |  |  | 2020
Commercial |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | 488,965 |  | 19.6 | % |  |  | 433,320 |  | 20.2 | %
Non-owner occupied RE |  |  | 666,833 |  | 26.8 | % |  |  | 585,269 |  | 27.3 | %
Construction |  |  | 64,425 |  | 2.6 | % |  |  | 61,467 |  | 2.9 | %
Business |  |  | 333,049 |  | 13.4 | % |  |  | 307,599 |  | 14.4 | %
Total commercial loans |  |  | 1,553,272 |  | 62.4 | % |  |  | 1,387,655 |  | 64.8 | %
Consumer |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 694,401 |  | 27.9 | % |  |  | 536,311 |  | 25.0 | %
Home equity |  |  | 154,839 |  | 6.2 | % |  |  | 156,957 |  | 7.3 | %
Construction |  |  | 59,846 |  | 2.4 | % |  |  | 40,525 |  | 1.9 | %
Other |  |  | 27,519 |  | 1.1 | % |  |  | 21,419 |  | 1.0 | %
Total consumer loans |  |  | 936,605 |  | 37.6 | % |  |  | 755,212 |  | 35.2 | %
Total gross loans, net of deferred fees |  |  | 2,489,877 |  | 100.0 | % |  |  | 2,142,867 |  | 100.0 | %
Less – allowance for loan losses |  |  | (30,408 | ) |  |  |  |  | (44,149 | ) |  |
Total loans, net |  | $ | 2,459,469 |  |  |  |  |  | 2,098,718 |  |  |
The composition of gross loans by rate type is as follows:
|  | December 31, |
(dollars in thousands) |  | 2021 |  |  | 2020 |
Floating rate loans |  | $ | 376,805 |  |  |  | 400,506 |
Fixed rate loans |  |  | 2,113,072 |  |  |  | 1,742,361 |
|  | $ | 2,489,877 |  |  |  | 2,142,867 |
At December 31, 2021, approximately $936.9 million of the Company’s mortgage loans were pledged as collateral for advances from the FHLB, as set forth in Note 10. Credit Quality Indicators Commercial We manage a consistent process for assessing commercial loan credit quality by monitoring our loan grading trends and past due statistics. All loans are subject to individual risk assessment. Our risk categories include Pass, Special Mention, Substandard, and Doubtful, each of which is defined by banking regulatory agencies. Delinquency statistics are also an important indicator of credit quality in the establishment of our allowance for credit losses. We categorize our loans into risk categories based on relevant information about the ability of the borrower to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. A description of the general characteristics of the risk grades is as follows: • Pass—These loans range from minimal credit risk to average however still acceptable credit risk. • Special mention—A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date. • Substandard—A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness, or weaknesses, that may jeopardize the liquidation of the debt. A substandard loan is characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. 85 Table of Contents • Doubtful—A doubtful loan has all of the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of the currently existing facts, conditions and values, highly questionable and improbable. The following tables provide past due information for outstanding commercial loans and include loans on nonaccrual status.
|  | December 31, 2021 |
|  | Owner |  |  | Non-owner |  |  |  |  |  |  |  |  |  |  |  |  |
(dollars in thousands) |  | occupied RE |  |  | occupied RE |  |  | Construction |  |  | Business |  |  | Total |
Current |  | $ | 488,965 |  |  |  | 666,833 |  |  |  | 64,425 |  |  |  | 333,049 |  |  |  | 1,553,272 |
30-59 days past due |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
60-89 days past due |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Greater than 90 days |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
|  | $ | 488,965 |  |  |  | 666,833 |  |  |  | 64,425 |  |  |  | 333,049 |  |  |  | 1,553,272 |
|  | December 31, 2020 |
|  | Owner |  |  | Non-owner |  |  |  |  |  |  |  |  |  |  |  |  |
|  | occupied RE |  |  | occupied RE |  |  | Construction |  |  | Business |  |  | Total |
Current |  | $ | 432,711 |  |  |  | 584,565 |  |  |  | 61,467 |  |  |  | 307,261 |  |  |  | 1,386,004 |
30-59 days past due |  |  | 403 |  |  |  | 282 |  |  |  | - |  |  |  | 35 |  |  |  | 720 |
60-89 days past due |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 266 |  |  |  | 266 |
Greater than 90 days |  |  | 206 |  |  |  | 422 |  |  |  | - |  |  |  | 37 |  |  |  | 665 |
|  | $ | 433,320 |  |  |  | 585,269 |  |  |  | 61,467 |  |  |  | 307,599 |  |  |  | 1,387,655 |
As of December 31, 2021 and 2020, loans 30 days or more past due represented 0.09% and 0.17% of our total loan portfolio, respectively. Commercial loans 30 days or more past due were 0.00% and 0.08% as of December 31, 2021 and 2020, respectively. The tables below provide a breakdown of outstanding commercial loans by risk category.
|  | December 31, 2021 |
|  | Owner |  |  | Non-owner |  |  |  |  |  |  |  |  |  |  |  |  |
(dollars in thousands) |  | occupied RE |  |  | occupied RE |  |  | Construction |  |  | Business |  |  | Total |
Pass |  | $ | 487,422 |  |  |  | 589,280 |  |  |  | 64,425 |  |  |  | 328,371 |  |  |  | 1,469,498 |
Special Mention |  |  | 327 |  |  |  | 48,310 |  |  |  | - |  |  |  | 1,530 |  |  |  | 50,167 |
Substandard |  |  | 1,216 |  |  |  | 29,243 |  |  |  | - |  |  |  | 3,148 |  |  |  | 33,607 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
|  | $ | 488,965 |  |  |  | 666,833 |  |  |  | 64,425 |  |  |  | 333,049 |  |  |  | 1,553,272 |
|  | December 31, 2020 |
|  | Owner |  |  | Non-owner |  |  |  |  |  |  |  |  |  |  |  |  |
(dollars in thousands) |  | occupied RE |  |  | occupied RE |  |  | Construction |  |  | Business |  |  | Total |
Pass |  | $ | 430,291 |  |  |  | 576,095 |  |  |  | 61,328 |  |  |  | 301,838 |  |  |  | 1,369,552 |
Special Mention |  |  | 624 |  |  |  | 587 |  |  |  | - |  |  |  | 1,703 |  |  |  | 2,914 |
Substandard |  |  | 2,405 |  |  |  | 8,587 |  |  |  | 139 |  |  |  | 4,058 |  |  |  | 15,189 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
|  | $ | 433,320 |  |  |  | 585,269 |  |  |  | 61,467 |  |  |  | 307,599 |  |  |  | 1,387,655 |
Consumer We manage a consistent process for assessing consumer loan credit quality by monitoring our loan grading trends and past due statistics. All loans are subject to individual risk assessment. Our risk categories include Pass, Special Mention, Substandard, and Doubtful, which are defined above. Delinquency statistics are also an important indicator of credit quality in the establishment of our allowance for loan losses. 86 Table of Contents The following tables provide past due information for outstanding consumer loans and include loans on nonaccrual status.
|  | December 31, 2021 |
(dollars in thousands) |  | Real estate |  | Home equity |  | Construction |  | Other |  | Total |
Current |  |  | 693,712 |  |  | 153,309 |  |  | 59,846 |  |  | 27,515 |  |  | 934,382 |
30-59 days past due |  |  | 135 |  |  | 1,356 |  |  | - |  |  | 4 |  |  | 1,495 |
60-89 days past due |  |  | - |  |  | 174 |  |  | - |  |  | - |  |  | 174 |
Greater than 90 days |  |  | 554 |  |  | - |  |  | - |  |  | - |  |  | 554 |
|  | $ | 694,401 |  |  | 154,839 |  |  | 59,846 |  |  | 27,519 |  |  | 936,605 |
|  | December 31, 2020 |
|  | Real estate |  | Home equity |  | Construction |  | Other |  | Total |
Current |  | $ | 534,648 |  |  | 156,657 |  |  | 40,525 |  |  | 21,419 |  |  | 753,249 |
30-59 days past due |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |
60-89 days past due |  |  | 332 |  |  | - |  |  | - |  |  | - |  |  | 332 |
Greater than 90 days |  |  | 1,331 |  |  | 300 |  |  | - |  |  | - |  |  | 1,631 |
|  | $ | 536,311 |  |  | 156,957 |  |  | 40,525 |  |  | 21,419 |  |  | 755,212 |
Consumer loans 30 days or more past due were 0.09% as of December 31, 2021 and 2020, respectively. The tables below provide a breakdown of outstanding consumer loans by risk category.
|  | December 31, 2021 |
(dollars in thousands) |  | Real estate |  |  | Home equity |  |  | Construction |  |  | Other |  |  | Total |
Pass |  | $ | 684,923 |  |  |  | 148,933 |  |  |  | 59,846 |  |  |  | 27,365 |  |  |  | 921,067 |
Special Mention |  |  | 4,294 |  |  |  | 2,986 |  |  |  | - |  |  |  | 129 |  |  |  | 7,409 |
Substandard |  |  | 5,184 |  |  |  | 2,920 |  |  |  | - |  |  |  | 25 |  |  |  | 8,129 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
|  | $ | 694,401 |  |  |  | 154,839 |  |  |  | 59,846 |  |  |  | 27,519 |  |  |  | 936,605 |
|  | December 31, 2020 |
(dollars in thousands) |  | Real estate |  |  | Home equity |  |  | Construction |  |  | Other |  |  | Total |
Pass |  | $ | 530,515 |  |  |  | 152,154 |  |  |  | 40,525 |  |  |  | 21,290 |  |  |  | 744,484 |
Special Mention |  |  | 1,968 |  |  |  | 1,005 |  |  |  | - |  |  |  | 91 |  |  |  | 3,064 |
Substandard |  |  | 3,828 |  |  |  | 3,798 |  |  |  | - |  |  |  | 38 |  |  |  | 7,664 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
|  | $ | 536,311 |  |  |  | 156,957 |  |  |  | 40,525 |  |  |  | 21,419 |  |  |  | 755,212 |
87 Table of Contents Nonperforming assets The following table shows the nonperforming assets and the related percentage of nonperforming assets to total assets and gross loans. Generally, a loan is placed on nonaccrual status when it becomes 90 days past due as to principal or interest, or when we believe, after considering economic and business conditions and collection efforts, that the borrower’s financial condition is such that collection of the contractual principal or interest on the loan is doubtful. A payment of interest on a loan that is classified as nonaccrual is recognized as a reduction in principal when received.
|  | December 31, |
(dollars in thousands) |  | 2021 |  |  | 2020 |
Commercial |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | - |  |  |  | - |
Non-owner occupied RE |  |  | 270 |  |  |  | 1,143 |
Construction |  |  | - |  |  |  | 139 |
Business |  |  | - |  |  |  | 195 |
Consumer |  |  |  |  |  |  |  |
Real estate |  |  | 989 |  |  |  | 2,536 |
Home equity |  |  | 653 |  |  |  | 547 |
Construction |  |  | - |  |  |  | - |
Other |  |  | - |  |  |  | - |
Nonaccruing troubled debt restructurings |  |  | 2,952 |  |  |  | 3,509 |
Total nonaccrual loans, including nonaccruing TDRs |  |  | 4,864 |  |  |  | 8,069 |
Other real estate owned |  |  | - |  |  |  | 1,169 |
Total nonperforming assets |  | $ | 4,864 |  |  |  | 9,238 |
Nonperforming assets as a percentage of: |  |  |  |  |  |  |  |
Total assets |  |  | 0.17 | % |  |  | 0.37 | %
Gross loans |  |  | 0.20 | % |  |  | 0.43 | %
Total loans over 90 days past due |  | $ | 554 |  |  |  | 2,296 |
Loans over 90 days past due and still accruing |  |  | - |  |  |  | - |
Accruing TDRs |  |  | 3,299 |  |  |  | 4,893 |
Foregone interest income on the nonaccrual loans for the year ended December 31, 2021 was approximately $55,000 and approximately $61,000 for the same period in 2020. Impaired Loans The table below summarizes key information for impaired loans. Our impaired loans include loans on nonaccrual status and loans modified in a TDR, whether on accrual or nonaccrual status. These impaired loans may have estimated impairment which is included in the allowance for loan losses. Our commercial and consumer impaired loans are evaluated individually to determine the related allowance for loan losses.
|  |  |  | December 31, 2021 |
|  |  |  |  |  | Recorded investment |  |  |  |  |
|  |  |  |  |  |  |  | Impaired loans |  |  | Impaired loans |  |  |  |
|  | Unpaid |  |  |  |  |  | with no related |  |  | with related |  |  | Related |
|  | Principal |  |  | Impaired |  |  | allowance for |  |  | allowance for |  |  | allowance for |
(dollars in thousands) |  | Balance |  |  | loans |  |  | loan losses |  |  | loan losses |  |  | loan losses |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | 1,261 |  |  |  | 1,261 |  |  |  | 1,261 |  |  |  | - |  |  |  | - |
Non-owner occupied RE |  |  | 2,012 |  |  |  | 1,070 |  |  |  | 270 |  |  |  | 800 |  |  |  | 171 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Business |  |  | 1,104 |  |  |  | 1,104 |  |  |  | - |  |  |  | 1,104 |  |  |  | 452 |
Total commercial |  |  | 4,377 |  |  |  | 3,435 |  |  |  | 1,531 |  |  |  | 1,904 |  |  |  | 623 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 2,638 |  |  |  | 2,561 |  |  |  | 1,743 |  |  |  | 818 |  |  |  | 144 |
Home equity |  |  | 2,206 |  |  |  | 2,044 |  |  |  | 1,989 |  |  |  | 55 |  |  |  | 55 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Other |  |  | 123 |  |  |  | 123 |  |  |  | - |  |  |  | 123 |  |  |  | 14 |
Total consumer |  |  | 4,967 |  |  |  | 4,728 |  |  |  | 3,732 |  |  |  | 996 |  |  |  | 213 |
Total |  | $ | 9,344 |  |  |  | 8,163 |  |  |  | 5,263 |  |  |  | 2,900 |  |  |  | 836 |
88 Table of Contents
|  |  |  | December 31, 2020 |
|  |  |  |  |  | Recorded investment |  |  |  |  |
|  |  |  |  |  |  |  | Impaired loans |  |  | Impaired loans |  |  |  |
|  | Unpaid |  |  |  |  |  | with no related |  |  | with related |  |  | Related |
|  | Principal |  |  | Impaired |  |  | allowance for |  |  | allowance for |  |  | allowance for |
(dollars in thousands) |  | Balance |  |  | loans |  |  | loan losses |  |  | loan losses |  |  | loan losses |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | 1,753 |  |  |  | 1,649 |  |  |  | 1,497 |  |  |  | 152 |  |  |  | 76 |
Non-owner occupied RE |  |  | 3,212 |  |  |  | 2,188 |  |  |  | 705 |  |  |  | 1,483 |  |  |  | 366 |
Construction |  |  | 141 |  |  |  | 139 |  |  |  | 139 |  |  |  | - |  |  |  | - |
Business |  |  | 2,892 |  |  |  | 2,449 |  |  |  | 279 |  |  |  | 2,170 |  |  |  | 897 |
Total commercial |  |  | 7,998 |  |  |  | 6,425 |  |  |  | 2,620 |  |  |  | 3,805 |  |  |  | 1,339 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 4,362 |  |  |  | 4,031 |  |  |  | 3,108 |  |  |  | 923 |  |  |  | 190 |
Home equity |  |  | 2,498 |  |  |  | 2,371 |  |  |  | 2,096 |  |  |  | 275 |  |  |  | 163 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Other |  |  | 135 |  |  |  | 135 |  |  |  | - |  |  |  | 135 |  |  |  | 17 |
Total consumer |  |  | 6,995 |  |  |  | 6,537 |  |  |  | 5,204 |  |  |  | 1,333 |  |  |  | 370 |
Total |  | $ | 14,993 |  |  |  | 12,962 |  |  |  | 7,824 |  |  |  | 5,138 |  |  |  | 1,709 |
The following table provides the average recorded investment in impaired loans and the amount of interest income recognized on impaired loans after impairment by portfolio segment and class.
|  | Year ended December 31, |
|  | 2021 |  |  | 2020 |  | 2019 |
|  | Average |  | Recognized |  | Average |  | Recognized |  | Average |  | Recognized |
|  | recorded |  | interest |  | recorded |  | interest |  | recorded |  | interest |
(dollars in thousands) |  | investment |  | income |  | investment |  | income |  | investment |  | income |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | 1,387 |  |  | 65 |  |  | 2,423 |  |  | 88 |  |  | 2,739 |  |  | 128 |
Non-owner occupied RE |  |  | 3,128 |  |  | 182 |  |  | 4,217 |  |  | 221 |  |  | 4,161 |  |  | 255 |
Construction |  |  | 55 |  |  | - |  |  | 56 |  |  | 6 |  |  | - |  |  | - |
Business |  |  | 2,218 |  |  | 62 |  |  | 2,306 |  |  | 243 |  |  | 1,582 |  |  | 79 |
Total commercial |  |  | 6,788 |  |  | 309 |  |  | 9,002 |  |  | 558 |  |  | 8,482 |  |  | 462 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 3,641 |  |  | 98 |  |  | 3,372 |  |  | 170 |  |  | 2,771 |  |  | 131 |
Home equity |  |  | 1,964 |  |  | 85 |  |  | 2,128 |  |  | 5 |  |  | 853 |  |  | 42 |
Construction |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |
Other |  |  | 129 |  |  | 4 |  |  | 141 |  |  | 79 |  |  | 153 |  |  | 5 |
Total consumer |  |  | 5,734 |  |  | 187 |  |  | 5,641 |  |  | 254 |  |  | 3,777 |  |  | 178 |
Total |  | $ | 12,522 |  |  | 496 |  |  | 14,643 |  |  | 812 |  |  | 12,259 |  |  | 640 |
89 Table of Contents Allowance for Loan Losses The following table summarizes the activity related to our allowance for loan losses:
|  | Year ended December 31, |
(dollars in thousands) |  | 2021 |  | 2020 |  | 2019 |
Balance, beginning of period |  | $ | 44,149 |  |  | 16,642 |  |  | 15,762 |
Provision for loan losses |  |  | (12,400 | ) |  | 29,600 |  |  | 2,300 |
Loan charge-offs: |  |  |  |  |  |  |  |  |  |
Commercial |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  |  | - |  |  | (94 | ) |  | (110 | )
Non-owner occupied RE |  |  | (837 | ) |  | (1,508 | ) |  | (239 | )
Construction |  |  | - |  |  | - |  |  | - |
Business |  |  | (1,181 | ) |  | (1,309 | ) |  | (910 | )
Total commercial |  |  | (2,018 | ) |  | (2,911 | ) |  | (1,259 | )
Consumer |  |  |  |  |  |  |  |  |  |
Real estate |  |  | - |  |  | (134 | ) |  | - |
Home equity |  |  | (139 | ) |  | (299 | ) |  | (174 | )
Construction |  |  | - |  |  | - |  |  | - |
Other |  |  | (9 | ) |  | (70 | ) |  | (82 | )
Total consumer |  |  | (148 | ) |  | (503 | ) |  | (256 | )
Total loan charge-offs |  |  | (2,166 | ) |  | (3,414 | ) |  | (1,515 | )
Loan recoveries: |  |  |  |  |  |  |  |  |  |
Commercial |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  |  | 94 |  |  | 65 |  |  | - |
Non-owner occupied RE |  |  | 263 |  |  | 670 |  |  | 2 |
Construction |  |  | - |  |  | - |  |  | - |
Business |  |  | 239 |  |  | 470 |  |  | 43 |
Total commercial |  |  | 596 |  |  | 1,205 |  |  | 45 |
Consumer |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 18 |  |  | 18 |  |  | 37 |
Home equity |  |  | 201 |  |  | 69 |  |  | 2 |
Construction |  |  | - |  |  | - |  |  | - |
Other |  |  | 10 |  |  | 29 |  |  | 11 |
Total consumer |  |  | 229 |  |  | 116 |  |  | 50 |
Total recoveries |  |  | 825 |  |  | 1,321 |  |  | 95 |
Net loan charge-offs |  |  | (1,341 | ) |  | (2,093 | ) |  | (1,420 | )
Balance, end of period |  | $ | 30,408 |  |  | 44,149 |  |  | 16,642 |
The following tables summarize the activity in the allowance for loan losses by our commercial and consumer portfolio segments.
|  | Year ended December 31, 2021 |
(dollars in thousands) |  | Commercial |  |  | Consumer |  |  | Total |
Balance, beginning of period |  | $ | 29,166 |  |  |  | 14,983 |  |  |  | 44,149 |
Provision |  |  | (7,014 | ) |  |  | (5,386 | ) |  |  | (12,400 | )
Loan charge-offs |  |  | (2,018 | ) |  |  | (148 | ) |  |  | (2,166 | )
Loan recoveries |  |  | 596 |  |  |  | 229 |  |  |  | 825 |
Net loan charge-offs |  |  | (1,422 | ) |  |  | 81 |  |  |  | (1,341 | )
Balance, end of period |  | $ | 20,730 |  |  |  | 9,678 |  |  |  | 30,408 |
|  | Year ended December 31, 2020 |
|  | Commercial |  |  | Consumer |  |  | Total |
Balance, beginning of period |  | $ | 11,372 |  |  |  | 5,270 |  |  |  | 16,642 |
Provision |  |  | 19,500 |  |  |  | 10,100 |  |  |  | 29,600 |
Loan charge-offs |  |  | (2,911 | ) |  |  | (503 | ) |  |  | (3,414 | )
Loan recoveries |  |  | 1,205 |  |  |  | 116 |  |  |  | 1,321 |
Net loan charge-offs |  |  | (1,706 | ) |  |  | (387 | ) |  |  | (2,093 | )
Balance, end of period |  | $ | 29,166 |  |  |  | 14,983 |  |  |  | 44,149 |
90 Table of Contents The following table disaggregates our allowance for loan losses and recorded investment in loans by method of impairment evaluation.
|  | December 31, 2021 |
|  | Allowance for loan losses |  | Recorded investment in loans |
(dollars in thousands) |  | Commercial |  | Consumer |  | Total |  | Commercial |  | Consumer |  | Total |
Individually evaluated |  | $ | 623 |  |  | 213 |  |  | 836 |  |  | 3,435 |  |  | 4,728 |  |  | 8,163 |
Collectively evaluated |  |  | 20,107 |  |  | 9,465 |  |  | 29,572 |  |  | 1,549,837 |  |  | 931,877 |  |  | 2,481,714 |
Total |  | $ | 20,730 |  |  | 9,678 |  |  | 30,408 |  |  | 1,553,272 |  |  | 936,605 |  |  | 2,489,877 |
|  | December 31, 2020 |
|  | Allowance for loan losses |  | Recorded investment in loans |
|  | Commercial |  | Consumer |  | Total |  | Commercial |  | Consumer |  | Total |
Individually evaluated |  | $ | 1,339 |  |  | 370 |  |  | 1,709 |  |  | 6,425 |  |  | 6,537 |  |  | 12,962 |
Collectively evaluated |  |  | 27,827 |  |  | 14,613 |  |  | 42,440 |  |  | 1,381,230 |  |  | 748,675 |  |  | 2,129,905 |
Total |  | $ | 29,166 |  |  | 14,983 |  |  | 44,149 |  |  | 1,387,655 |  |  | 755,212 |  |  | 2,142,867 |

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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