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Loans and Allowance for Credit Losses | 3 Months Ended
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Mar. 31, 2022
Receivables [Abstract] |
Loans and Allowance for Credit Losses | NOTE 4 – Loans and Allowance for Credit Losses The following table summarizes the composition of our loan portfolio. Total gross loans are recorded net of deferred loan fees and costs, which totaled $5.5 million as of March 31, 2022 and $5.0 million as of December 31, 2021.
|  | March 31, 2022 |  |  | December 31, 2021 |
(dollars in thousands) |  | Amount |  |  | % of Total |  |  | Amount |  |  | % of Total |
Commercial |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | 527,776 |  |  |  | 19.8 | % |  | $ | 488,965 |  |  |  | 19.6 | %
Non-owner occupied RE |  |  | 705,811 |  |  |  | 26.5 | % |  |  | 666,833 |  |  |  | 26.8 | %
Construction |  |  | 75,015 |  |  |  | 2.8 | % |  |  | 64,425 |  |  |  | 2.6 | %
Business |  |  | 352,932 |  |  |  | 13.3 | % |  |  | 333,049 |  |  |  | 13.4 | %
Total commercial loans |  |  | 1,661,534 |  |  |  | 62.4 | % |  |  | 1,553,272 |  |  |  | 62.4 | %
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 745,667 |  |  |  | 28.0 | % |  |  | 694,401 |  |  |  | 27.9 | %
Home equity |  |  | 155,678 |  |  |  | 5.9 | % |  |  | 154,839 |  |  |  | 6.2 | %
Construction |  |  | 72,627 |  |  |  | 2.7 | % |  |  | 59,846 |  |  |  | 2.4 | %
Other |  |  | 25,169 |  |  |  | 1.0 | % |  |  | 27,519 |  |  |  | 1.1 | %
Total consumer loans |  |  | 999,141 |  |  |  | 37.6 | % |  |  | 936,605 |  |  |  | 37.6 | %
Total gross loans, net of deferred fees |  |  | 2,660,675 |  |  |  | 100.0 | % |  |  | 2,489,877 |  |  |  | 100.0 | %
Less—allowance for credit losses |  |  | (32,944 | ) |  |  |  |  |  |  | (30,408 | ) |  |  |  |
Total loans, net |  | $ | 2,627,731 |  |  |  |  |  |  | $ | 2,459,469 |  |  |  |  |
Maturities and Sensitivity of Loans to Changes in Interest Rates The information in the following tables summarizes the loan maturity distribution by type and related interest rate characteristics based on the contractual maturities of individual loans, including loans which may be subject to renewal at their contractual maturity. Renewal of such loans is subject to review and credit approval, as well as modification of terms upon maturity. Actual repayments of loans may differ from the maturities reflected below, because borrowers have the right to prepay obligations with or without prepayment penalties.
|  | March 31, 2022 |
(dollars in thousands) |  | One year or less |  |  | After one but within five years |  |  | After five but within fifteen years |  |  | After fifteen years |  |  | Total |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | 15,677 |  |  |  | 116,156 |  |  |  | 353,233 |  |  |  | 42,710 |  |  |  | 527,776 |
Non-owner occupied RE |  |  | 48,491 |  |  |  | 338,553 |  |  |  | 290,547 |  |  |  | 28,220 |  |  |  | 705,811 |
Construction |  |  | 4,668 |  |  |  | 24,360 |  |  |  | 36,711 |  |  |  | 9,276 |  |  |  | 75,015 |
Business |  |  | 71,844 |  |  |  | 155,045 |  |  |  | 122,820 |  |  |  | 3,223 |  |  |  | 352,932 |
Total commercial loans |  |  | 140,680 |  |  |  | 634,114 |  |  |  | 803,311 |  |  |  | 83,429 |  |  |  | 1,661,534 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 9,839 |  |  |  | 45,057 |  |  |  | 182,195 |  |  |  | 508,576 |  |  |  | 745,667 |
Home equity |  |  | 2,309 |  |  |  | 20,411 |  |  |  | 127,604 |  |  |  | 5,354 |  |  |  | 155,678 |
Construction |  |  | 932 |  |  |  | 1,651 |  |  |  | 8,858 |  |  |  | 61,186 |  |  |  | 72,627 |
Other |  |  | 5,160 |  |  |  | 16,368 |  |  |  | 3,219 |  |  |  | 422 |  |  |  | 25,169 |
Total consumer loans |  |  | 18,240 |  |  |  | 83,487 |  |  |  | 321,876 |  |  |  | 575,538 |  |  |  | 999,141 |
Total gross loans, net of deferred fees |  | $ | 158,920 |  |  |  | 717,601 |  |  |  | 1,125,187 |  |  |  | 658,967 |  |  |  | 2,660,675 |
|  | December 31, 2021 |
(dollars in thousands) |  | One year or less |  |  | After one but within five years |  |  | After five but within fifteen years |  |  | After fifteen years |  |  | Total |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | 16,858 |  |  |  | 120,480 |  |  |  | 316,261 |  |  |  | 35,366 |  |  |  | 488,965 |
Non-owner occupied RE |  |  | 47,453 |  |  |  | 329,085 |  |  |  | 263,317 |  |  |  | 26,978 |  |  |  | 666,833 |
Construction |  |  | 4,882 |  |  |  | 16,393 |  |  |  | 29,310 |  |  |  | 13,840 |  |  |  | 64,425 |
Business |  |  | 66,833 |  |  |  | 152,732 |  |  |  | 109,008 |  |  |  | 4,476 |  |  |  | 333,049 |
Total commercial loans |  |  | 136,026 |  |  |  | 618,690 |  |  |  | 717,896 |  |  |  | 80,660 |  |  |  | 1,553,272 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 14,632 |  |  |  | 45,219 |  |  |  | 162,655 |  |  |  | 471,895 |  |  |  | 694,401 |
Home equity |  |  | 2,178 |  |  |  | 21,280 |  |  |  | 125,427 |  |  |  | 5,954 |  |  |  | 154,839 |
Construction |  |  | 961 |  |  |  | 594 |  |  |  | 8,956 |  |  |  | 49,335 |  |  |  | 59,846 |
Other |  |  | 8,071 |  |  |  | 15,711 |  |  |  | 3,341 |  |  |  | 396 |  |  |  | 27,519 |
Total consumer |  |  | 25,842 |  |  |  | 82,804 |  |  |  | 300,379 |  |  |  | 527,580 |  |  |  | 936,605 |
Total gross loans, net of deferred fees |  | $ | 161,868 |  |  |  | 701,494 |  |  |  | 1,018,275 |  |  |  | 608,240 |  |  |  | 2,489,877 |
The following table summarizes the loans due after one year by category as of March 31, 2022.
|  | Interest Rate |
(dollars in thousands) |  | Fixed |  |  | Floating or Adjustable |
Commercial |  |  |  |  |  |
Owner occupied RE |  | $ | 507,622 |  |  |  | 4,477 |
Non-owner occupied RE |  |  | 578,786 |  |  |  | 78,534 |
Construction |  |  | 66,873 |  |  |  | 3,474 |
Business |  |  | 212,419 |  |  |  | 68,669 |
Total commercial loans |  |  | 1,365,700 |  |  |  | 155,154 |
Consumer |  |  |  |  |  |  |  |
Real estate |  |  | 735,758 |  |  |  | 70 |
Home equity |  |  | 11,634 |  |  |  | 141,735 |
Construction |  |  | 71,695 |  |  |  | - |
Other |  |  | 13,208 |  |  |  | 6,801 |
Total consumer loans |  |  | 832,295 |  |  |  | 148,606 |
Total gross loans, net of deferred fees |  | $ | 2,197,995 |  |  |  | 303,760 |
Credit Quality Indicators The Company tracks credit quality based on its internal risk ratings. Upon origination, a loan is assigned an initial risk grade, which is generally based on several factors such as the borrower’s credit score, the loan-to-value ratio, the debt-to-income ratio, etc. After loans are initially graded, they are monitored regularly for credit quality based on many factors, such as payment history, the borrower’s financial status, and changes in collateral value. Loans can be downgraded or upgraded depending on management’s evaluation of these factors. Internal risk-grading policies are consistent throughout each loan type. A description of the general characteristics of the risk grades is as follows:
| ● | Pass—These loans range from minimal to average credit risk however still have 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.
| ● | 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 table presents loan balances classified by credit quality indicators by year of origination as of March 31, 2022.
|  | March 31, 2022 |
(dollars in thousands) |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | 2018 |  |  | Prior |  |  | Revolving |  |  | Total |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 48,943 |  |  |  | 136,043 |  |  |  | 91,485 |  |  |  | 76,409 |  |  |  | 42,537 |  |  |  | 130,973 |  |  |  | - |  |  |  | 526,390 |
Special Mention |  |  | - |  |  |  | 163 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 159 |  |  |  | - |  |  |  | 322 |
Substandard |  |  | - |  |  |  | - |  |  |  | 653 |  |  |  | - |  |  |  | 298 |  |  |  | 113 |  |  |  | - |  |  |  | 1,064 |
Total Owner occupied RE |  |  | 48,943 |  |  |  | 136,206 |  |  |  | 92,138 |  |  |  | 76,409 |  |  |  | 42,835 |  |  |  | 131,245 |  |  |  | - |  |  |  | 527,776 |
Non-owner occupied RE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 61,668 |  |  |  | 186,526 |  |  |  | 118,651 |  |  |  | 82,442 |  |  |  | 84,310 |  |  |  | 145,200 |  |  |  | - |  |  |  | 678,797 |
Special Mention |  |  | - |  |  |  | 205 |  |  |  | - |  |  |  | 313 |  |  |  | 5,544 |  |  |  | 5,614 |  |  |  | - |  |  |  | 11,676 |
Substandard |  |  | - |  |  |  | 141 |  |  |  | - |  |  |  | 13,237 |  |  |  | 309 |  |  |  | 1,651 |  |  |  | - |  |  |  | 15,338 |
Total Non-owner occupied RE |  |  | 61,668 |  |  |  | 186,872 |  |  |  | 118,651 |  |  |  | 95,992 |  |  |  | 90,163 |  |  |  | 152,465 |  |  |  | - |  |  |  | 705,811 |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 6,472 |  |  |  | 53,371 |  |  |  | 9,073 |  |  |  | 4,498 |  |  |  | 1,601 |  |  |  | - |  |  |  | - |  |  |  | 75,015 |
Special Mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Construction |  |  | 6,472 |  |  |  | 53,371 |  |  |  | 9,073 |  |  |  | 4,498 |  |  |  | 1,601 |  |  |  | - |  |  |  | - |  |  |  | 75,015 |
Business |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 30,305 |  |  |  | 62,583 |  |  |  | 36,345 |  |  |  | 27,908 |  |  |  | 38,361 |  |  |  | 36,286 |  |  |  | 117,232 |  |  |  | 349,020 |
Special Mention |  |  | 224 |  |  |  | 53 |  |  |  | 398 |  |  |  | - |  |  |  | - |  |  |  | 168 |  |  |  | 101 |  |  |  | 944 |
Substandard |  |  | - |  |  |  | - |  |  |  | 1,294 |  |  |  | 204 |  |  |  | 362 |  |  |  | 1,083 |  |  |  | 25 |  |  |  | 2,968 |
Total Business |  |  | 30,529 |  |  |  | 62,636 |  |  |  | 38,037 |  |  |  | 28,112 |  |  |  | 38,723 |  |  |  | 37,537 |  |  |  | 117,358 |  |  |  | 352,932 |
Total Commercial loans |  |  | 147,612 |  |  |  | 439,085 |  |  |  | 257,899 |  |  |  | 205,011 |  |  |  | 173,322 |  |  |  | 321,247 |  |  |  | 117,358 |  |  |  | 1,661,534 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 69,226 |  |  |  | 255,662 |  |  |  | 197,008 |  |  |  | 80,005 |  |  |  | 42,490 |  |  |  | 91,948 |  |  |  | - |  |  |  | 736,339 |
Special Mention |  |  |  |  |  |  | 1,113 |  |  |  | 1,387 |  |  |  | 1,068 |  |  |  | 568 |  |  |  | 848 |  |  |  | - |  |  |  | 4,984 |
Substandard |  |  | - |  |  |  | 902 |  |  |  | 230 |  |  |  | 419 |  |  |  | 963 |  |  |  | 1,830 |  |  |  | - |  |  |  | 4,344 |
Total Real estate |  |  | 69,226 |  |  |  | 257,677 |  |  |  | 198,625 |  |  |  | 81,492 |  |  |  | 44,021 |  |  |  | 94,626 |  |  |  | - |  |  |  | 745,667 |
Home equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 150,767 |  |  |  | 150,767 |
Special Mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,186 |  |  |  | 2,186 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,725 |  |  |  | 2,725 |
Total Home equity |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 155,678 |  |  |  | 155,678 |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 10,078 |  |  |  | 42,845 |  |  |  | 19,420 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 72,343 |
Special Mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 284 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 284 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Construction |  |  | 10,078 |  |  |  | 42,845 |  |  |  | 19,420 |  |  |  | 284 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 72,627 |
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 1,177 |  |  |  | 2,700 |  |  |  | 1,250 |  |  |  | 2,001 |  |  |  | 711 |  |  |  | 3,916 |  |  |  | 13,227 |  |  |  | 24,982 |
Special Mention |  |  | - |  |  |  | - |  |  |  | 8 |  |  |  | 38 |  |  |  | 76 |  |  |  | 10 |  |  |  | 33 |  |  |  | 165 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 12 |  |  |  | - |  |  |  | - |  |  |  | 10 |  |  |  | 22 |
Total Other |  |  | 1,177 |  |  |  | 2,700 |  |  |  | 1,258 |  |  |  | 2,051 |  |  |  | 787 |  |  |  | 3,926 |  |  |  | 13,270 |  |  |  | 25,169 |
Total Consumer loans |  |  | 80,481 |  |  |  | 303,222 |  |  |  | 219,303 |  |  |  | 83,827 |  |  |  | 44,808 |  |  |  | 98,552 |  |  |  | 168,948 |  |  |  | 999,141 |
Total loans |  | $ | 228,093 |  |  |  | 742,307 |  |  |  | 477,202 |  |  |  | 288,838 |  |  |  | 218,130 |  |  |  | 419,799 |  |  |  | 286,306 |  |  |  | 2,660,675 |
The following table presents loan balances classified by credit quality indicators and loan categories as of December 31, 2021.
|  | December 31, 2021 |
|  | Commercial |  |  | Consumer |  |  |  |
(dollars in thousands) |  | Owner occupied RE |  |  | Non-owner occupied RE |  |  | Construction |  |  | Business |  |  | Real Estate |  |  | Home Equity |  |  | Construction |  |  | Other |  |  | Total |
Pass |  | $ | 487,422 |  |  |  | 589,280 |  |  |  | 64,425 |  |  |  | 328,371 |  |  |  | 684,923 |  |  |  | 148,933 |  |  |  | 59,846 |  |  |  | 27,365 |  |  |  | 2,390,565 |
Special mention |  |  | 327 |  |  |  | 48,310 |  |  |  | - |  |  |  | 1,530 |  |  |  | 4,294 |  |  |  | 2,986 |  |  |  | - |  |  |  | 129 |  |  |  | 57,576 |
Substandard |  |  | 1,216 |  |  |  | 29,243 |  |  |  | - |  |  |  | 3,148 |  |  |  | 5,184 |  |  |  | 2,920 |  |  |  | - |  |  |  | 25 |  |  |  | 41,736 |
Total |  | $ | 488,965 |  |  |  | 666,833 |  |  |  | 64,425 |  |  |  | 333,049 |  |  |  | 694,401 |  |  |  | 154,839 |  |  |  | 59,846 |  |  |  | 27,519 |  |  |  | 2,489,877 |
The following tables loan balances by payment status.
|  | March 31, 2022 |
(dollars in thousands) |  | Accruing 30-59 days past due |  |  | Accruing 60-89 days past due |  |  | Accruing 90 days or more past due |  |  | Nonaccrual loans |  |  | Accruing current |  |  | Total |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 527,776 |  |  |  | 527,776 |
Non-owner occupied RE |  |  | 75 |  |  |  | - |  |  |  | - |  |  |  | 1,026 |  |  |  | 704,710 |  |  |  | 705,811 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 75,015 |  |  |  | 75,015 |
Business |  |  | 124 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 352,808 |  |  |  | 352,932 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 757 |  |  |  | 695 |  |  |  | - |  |  |  | 1,482 |  |  |  | 742,733 |  |  |  | 745,667 |
Home equity |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | 2,024 |  |  |  | 153,653 |  |  |  | 155,678 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 72,627 |  |  |  | 72,627 |
Other |  |  | 3 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 25,166 |  |  |  | 25,169 |
Total |  | $ | 959 |  |  |  | 696 |  |  |  | - |  |  |  | 4,532 |  |  |  | 2,654,488 |  |  |  | 2,660,675 |
|  | December 31, 2021 |
(dollars in thousands) |  | Accruing 30-59 days past due |  |  | Accruing 60-89 days past due |  |  | Accruing 90 days or more past due |  |  | Nonaccrual loans |  |  | Accruing current |  |  | Total |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 488,965 |  |  |  | 488,965 |
Non-owner occupied RE |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,069 |  |  |  | 665,764 |  |  |  | 666,833 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 64,425 |  |  |  | 64,425 |
Business |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 333,049 |  |  |  | 333,049 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 136 |  |  |  | - |  |  |  | - |  |  |  | 1,750 |  |  |  | 692,515 |  |  |  | 694,401 |
Home equity |  |  | 417 |  |  |  | 174 |  |  |  | - |  |  |  | 2,045 |  |  |  | 152,203 |  |  |  | 154,839 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 59,846 |  |  |  | 59,846 |
Other |  |  | 5 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 27,514 |  |  |  | 27,519 |
Total |  | $ | 558 |  |  |  | 174 |  |  |  | - |  |  |  | 4,864 |  |  |  | 2,484,281 |  |  |  | 2,489,877 |
As of March 31, 2022 and December 31, 2021, loans 30 days or more past due represented 0.13% and 0.09% of the Company’s total loan portfolio, respectively. Commercial loans 30 days or more past due were 0.01% and 0.00% of the Company’s total loan portfolio as of March 31, 2022 and December 31, 2021, respectively. Consumer loans 30 days or more past due were 0.12% and 0.09% of total loans as of March 31, 2022 and December 31, 2021, respectively. Nonperforming assets Generally, a loan is placed on nonaccrual status when it becomes 90 days past due as to principal or interest, or when the Company believes, 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. The following table shows the nonperforming assets and the related percentage of nonperforming assets to total assets and gross loans.
(dollars in thousands) |  | March 31, 2022 |  |  | December 31, 2021 |
Nonaccrual loans |  | $ | 1,819 |  |  |  | - |
Nonaccruing TDRs |  |  | 2,713 |  |  |  | 2,952 |
Total nonaccrual loans, including nonaccruing TDRs |  |  | 4,532 |  |  |  | 4,864 |
Other real estate owned |  |  | - |  |  |  | - |
Total nonperforming assets |  | $ | 4,532 |  |  |  | 4,864 |
Nonperforming assets as a percentage of: |  |  |  |  |  |  |  |
Total assets |  |  | 0.15 | % |  |  | 0.17 | %
Gross loans |  |  | 0.17 | % |  |  | 0.20 | %
Total loans over 90 days past due |  | $ | 554 |  |  |  | 554 |
Loans over 90 days past due and still accruing |  |  | - |  |  |  | - |
Accruing troubled debt restructurings |  |  | 3,241 |  |  |  | 3,299 |
The table below summarizes nonaccrual loans by major categories for the periods presented.
|  | CECL |  |  | Incurred loss |
|  | March 31, 2022 |  |  | December 31, 2021 |
|  | Nonaccrual |  |  | Nonaccrual |  |  |  |  |  |  |
|  | loans |  |  | loans |  |  | Total |  |  | Total |
|  | with no |  |  | with an |  |  | nonaccrual |  |  | nonaccrual |
(dollars in thousands) |  | allowance |  |  | allowance |  |  | loans |  |  | loans |
Commercial |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | - |  |  |  | - |  |  |  | - |  |  |  | - |
Non-owner occupied RE |  |  | 265 |  |  |  | 761 |  |  |  | 1,026 |  |  |  | 1,070 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Business |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total commercial |  |  | 265 |  |  |  | 761 |  |  |  | 1,026 |  |  |  | 1,070 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 987 |  |  |  | 495 |  |  |  | 1,482 |  |  |  | 1,750 |
Home equity |  |  | 1,971 |  |  |  | 53 |  |  |  | 2,024 |  |  |  | 2,044 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Other |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total consumer |  |  | 2,958 |  |  |  | 548 |  |  |  | 3,506 |  |  |  | 3,794 |
Total |  | $ | 3,224 |  |  |  | 1,309 |  |  |  | 4,532 |  |  |  | 4,864 |
The table below summarizes key information for loans individually evaluated for impairment loans under the incurred loss methodology. These loans include loans on nonaccrual status and loans modified in a TDR, whether on accrual or nonaccrual status. These loans may have estimated impairment which is included in the allowance for credit losses.
|  |  |  |  |  |  |  | December 31, 2021 |
|  |  |  |  |  |  |  | Recorded investment |  |  |  |
|  |  |  |  |  |  |  | Impaired loans |  |  | Impaired loans |  |  |  |
|  | Unpaid |  |  |  |  |  | with no related |  |  | with related |  |  | Related |
(dollars in thousands) |  | Principal Balance |  |  | Impaired loans |  |  | allowance for credit losses |  |  | allowance for credit losses |  |  | allowance for credit 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 |
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.
|  | Three months ended March 31, 2021 |  |  | Year ended December 31, 2021 |
(dollars in thousands) |  | Average recorded investment |  |  | Recognized interest income |  |  | Average recorded investment |  |  | Recognized interest income |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | 1,569 |  |  |  | 16 |  |  |  | 1,387 |  |  |  | 65 |
Non-owner occupied RE |  |  | 2,161 |  |  |  | 62 |  |  |  | 3,128 |  |  |  | 182 |
Construction |  |  | 137 |  |  |  | 2 |  |  |  | 55 |  |  |  | - |
Business |  |  | 2,329 |  |  |  | 34 |  |  |  | 2,218 |  |  |  | 62 |
Total commercial |  |  | 6,196 |  |  |  | 114 |  |  |  | 6,788 |  |  |  | 309 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 4,212 |  |  |  | 43 |  |  |  | 3,641 |  |  |  | 98 |
Home equity |  |  | 2,030 |  |  |  | 16 |  |  |  | 1,964 |  |  |  | 85 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Other |  |  | 134 |  |  |  | 1 |  |  |  | 129 |  |  |  | 4 |
Total consumer |  |  | 6,376 |  |  |  | 60 |  |  |  | 5,734 |  |  |  | 187 |
Total |  | $ | 12,572 |  |  |  | 174 |  |  |  | 12,522 |  |  |  | 496 |
Allowance for Credit Losses The following table summarizes the activity related to the allowance for credit losses for the three months ended March 31, 2022 under the CECL methodology.
|  | Three months ended March 31, 2022 |
|  | Commercial |  |  | Consumer |  |  |  |
(dollars in thousands) |  | Owner occupied RE |  |  | Non- owner occupied RE |  |  | Construction |  |  | Business |  |  | Real Estate |  |  | Home Equity |  |  | Construction |  |  | Other |  |  | Total |
Balance, beginning of period |  | $ | 4,700 |  |  |  | 10,518 |  |  |  | 625 |  |  |  | 4,887 |  |  |  | 7,083 |  |  |  | 1,697 |  |  |  | 578 |  |  |  | 320 |  |  |  | 30,408 |
Adjustment for CECL |  |  | (313 | ) |  |  | 333 |  |  |  | 154 |  |  |  | 1,057 |  |  |  | (294 | ) |  |  | 438 |  |  |  | 130 |  |  |  | (5 | ) |  |  | 1,500 |
Provision for credit losses |  |  | 511 |  |  |  | (878 | ) |  |  | 150 |  |  |  | 159 |  |  |  | 813 |  |  |  | 165 |  |  |  | 136 |  |  |  | (31 | ) |  |  | 1,025 |
Loan charge-offs |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (169 | ) |  |  | - |  |  |  | - |  |  |  | (169 | )
Loan recoveries |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 114 |  |  |  | - |  |  |  | 66 |  |  |  | - |  |  |  | - |  |  |  | 180 |
Net loan recoveries (charge-offs) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 114 |  |  |  | - |  |  |  | (103 | ) |  |  | - |  |  |  | - |  |  |  | 11 |
Balance, end of period |  | $ | 4,898 |  |  |  | 9,973 |  |  |  | 929 |  |  |  | 6,217 |  |  |  | 7,602 |  |  |  | 2,197 |  |  |  | 844 |  |  |  | 284 |  |  |  | 32,944 |
Net charge-offs (recoveries) to average loans (annualized) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.00 | %
Allowance for credit losses to gross loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1.24 | %
Allowance for credit losses to nonperforming loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 726.88 | %
Prior to the adoption of ASC 326 on January 1, 2022, the Company calculated the allowance for loan losses under the incurred loss methodology. The following two tables are disclosures related to the allowance for loan losses in prior periods under this methodology.
|  | Three months ended March 31, 2021 |
|  | Commercial |  |  | Consumer |  |  |  |  |
(dollars in thousands) |  | Owner occupied RE |  |  | Non- owner occupied RE |  |  | Construction |  |  | Business |  |  | Real Estate |  |  | Home Equity |  |  | Construction |  |  | Other |  |  | Total |
Balance, beginning of period |  | $ | 8,145 |  |  |  | 12,049 |  |  |  | 1,154 |  |  |  | 7,845 |  |  |  | 10,453 |  |  |  | 3,249 |  |  |  | 747 |  |  |  | 507 |  |  |  | 44,149 |
Provision for loan losses |  |  | (991 | ) |  |  | 3,146 |  |  |  | (327 | ) |  |  | (785 | ) |  |  | (787 | ) |  |  | (423 | ) |  |  | (62 | ) |  |  | (71 | ) |  |  | (300 | )
Loan charge-offs |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (267 | ) |  |  | - |  |  |  | (139 | ) |  |  | - |  |  |  | - |  |  |  | (406 | )
Loan recoveries |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 55 |  |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | - |  |  |  | 56 |
Net loan recoveries (charge-offs) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (212 | ) |  |  | - |  |  |  | (138 | ) |  |  | - |  |  |  | - |  |  |  | (350 | )
Balance, end of period |  | $ | 7,154 |  |  |  | 15,195 |  |  |  | 827 |  |  |  | 6,848 |  |  |  | 9,666 |  |  |  | 2,688 |  |  |  | 685 |  |  |  | 436 |  |  |  | 43,499 |
Net charge-offs to average loans (annualized) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.07 | %
Allowance for loan losses to gross loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1.99 | %
Allowance for loan losses to nonperforming loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 557.47 | %
The following table disaggregates the allowance for loan losses and recorded investment in loans by impairment methodology under the incurred loss methodology.
|  | 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 |
|  | March 31, 2021 |
|  | Allowance for loan losses |  |  | Recorded investment in loans |
(dollars in thousands) |  | Commercial |  |  | Consumer |  |  | Total |  |  | Commercial |  |  | Consumer |  |  | Total |
Individually evaluated |  | $ | 1,171 |  |  |  | 464 |  |  |  | 1,635 |  |  |  | 5,967 |  |  |  | 6,215 |  |  |  | 12,182 |
Collectively evaluated |  |  | 28,853 |  |  |  | 13,011 |  |  |  | 41,864 |  |  |  | 1,382,616 |  |  |  | 788,884 |  |  |  | 2,171,500 |
Total |  | $ | 30,024 |  |  |  | 13,475 |  |  |  | 43,499 |  |  |  | 1,388,583 |  |  |  | 795,099 |  |  |  | 2,183,682 |
Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. The Company reviews individually evaluated loans for designation as collateral dependent loans, as well as other loans that management of the Company designates as having higher risk. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses. The following table presents an analysis of collateral-dependent loans of the Company as of March 31, 2022.
|  | March 31, 2022 |
|  | Real |  |  | Business |  |  |  |  |  |  |
(dollars in thousands) |  | estate |  |  | assets |  |  | Other |  |  | Total |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | 1,250 |  |  |  | - |  |  |  | - |  |  |  | 1,250 |
Non-owner occupied RE |  |  | 265 |  |  |  | - |  |  |  | - |  |  |  | 265 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Business |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total commercial |  |  | 1,515 |  |  |  | - |  |  |  | - |  |  |  | 1,515 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 1,484 |  |  |  | - |  |  |  | - |  |  |  | 1,484 |
Home equity |  |  | 2,024 |  |  |  | - |  |  |  | - |  |  |  | 2,024 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Other |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total consumer |  |  | 3,508 |  |  |  | - |  |  |  | - |  |  |  | 3,508 |
Total |  | $ | 5,023 |  |  |  | - |  |  |  | - |  |  |  | 5,023 |
Under CECL, for collateral dependent loans, the Company has adopted the practical expedient to measure the allowance for credit losses based on the fair value of collateral. The allowance for credit losses is calculated on an individual loan basis based on the shortfall between the fair value of the loan’s collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required. Allowance for Credit Losses - Unfunded Loan Commitments The allowance for credit losses for unfunded loan commitments was $2.1 million at March 31, 2022 and is separately classified on the balance sheet within other liabilities. Prior to the adoption of CECL, the Company’s reserve for unfunded commitments was not material. The following table presents the balance and activity in the allowance for credit losses for unfunded loan commitments for the three months ended March 31, 2022.
|  | Three months ended |
(dollars in thousands) |  | March 31, 2022 |
Balance, beginning of period |  |  | - |
Adjustment for adoption of CECL |  | $ | 2,000 |
Provision for (reversal of) loan losses |  |  | 80 |
Loan charge-offs |  |  | - |
Loan recoveries |  |  | - |
Net loan (charge-offs) recoveries |  |  | - |
Balance, end of period |  | $ | 2,080 |

X
- 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 https://asc.fasb.org/subtopic&trid=2196772 + Details
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